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, 2020

OR

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

For the transition period from____ to ____ .

Commission file number: 1-34167

ePlus inc.

(Exact name of registrant as specified in its charter)

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

13595 Dulles Technology Drive, Herndon, VA 20171-3413

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

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

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

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

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

Yes ☒   No ☐

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

Yes ☒   No ☐

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

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

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

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

Yes ☐  No ☒

The number of shares of common stock outstanding as of November 2, 2020, was 13,507,214.

TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I. Financial Information:
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets as of September 30, 2020 and March 31, 2020	5
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2020 and 2019	6
	Unaudited Consolidated Statements of Comprehensive Income for the Three  and Six Months Ended September 30, 2020 and 2019	7
	Unaudited Consolidated Statements of Cash Flows for the Three and Six Months Ended September 30, 2020 and 2019	8
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended September 30, 2020 and 2019	10
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
Part II. Other Information:
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
Signatures & Certifications		47

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:

• the duration and impact of the novel coronavirus pandemic (“COVID-19”), which could materially adversely affect our financial condition and results of operations and has resulted in governmental authorities imposing numerous unprecedented measures to try to contain the virus that has impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective vendors, suppliers, and partners;

• national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, interest rates, and downward pressure on prices;

• significant adverse changes in, reductions in, or loss of our largest volume customer or one or more of our large volume customers, or vendors;

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

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

• uncertainty regarding the phase out of LIBOR may negatively affect our operating results;

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

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

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

• changes in the Information Technology (“IT”) industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service (“IaaS”), and software as a service (“SaaS”);

• 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;

• reduction of vendor incentives provided to us;

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

• the possibility of goodwill impairment charges in the future;

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

• adapting to meet changes in markets and competitive developments;

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

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

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

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

• performing professional and managed services competently;

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

3

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

• exposure to changes in, interpretations of, or enforcement trends in legislation and regulatory matters;

• domestic and international economic regulations uncertainty (e.g., tariffs, and trade agreements);

• our contracts may not be adequate to protect us, and we are subject to audit in which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim;

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

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

• maintaining our proprietary software and updating our technology infrastructure to remain competitive in the marketplace;

• disruptions or a security breach in our or our vendors’ IT systems and data and audio communication networks;

• our ability to realize our investment in leased equipment;

• our ability to successfully perform due diligence and integrate acquired businesses;

• 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 or inaccurate costs and completion dates for our services, which could affect our estimates; and

• our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third-party patents, and the costs associated with those actions, and, when appropriate, license required technology.

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

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30, 2020			March 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	161,081		$	86,231
Accounts receivable—trade, net		369,037			374,998
Accounts receivable—other, net		40,832			36,570
Inventories		73,751			50,268
Financing receivables—net, current		92,766			70,169
Deferred costs		22,329			22,306
Other current assets		8,233			9,256
Total current assets		768,029			649,798
Financing receivables and operating leases—net		87,926			74,158
Property, equipment and other assets		34,314			32,596
Goodwill		118,177			118,097
Other intangible assets—net		30,265			34,464
TOTAL ASSETS	$	1,038,711		$	909,113
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	104,893		$	82,919
Accounts payable—floor plan		218,970			127,416
Salaries and commissions payable		30,284			30,952
Deferred revenue		59,078			55,480
Recourse notes payable—current		2,286			37,256
Non-recourse notes payable—current		35,610			29,630
Other current liabilities		25,372			22,986
Total current liabilities		476,493			386,639
Non-recourse notes payable—long term		2,444			5,872
Deferred tax liability—net		3,762			2,730
Other liabilities		32,942			27,727
TOTAL LIABILITIES		515,641			422,968
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding		-			-
Common stock, $0.01 per share par value; 25,000 shares authorized; 13,537 outstanding at September 30, 2020 and 13,500 outstanding at March 31, 2020		145			144
Additional paid-in capital		148,845			145,197
Treasury stock, at cost, 958 shares at September 30, 2020 and 896 shares at March 31, 2020		(72,911	)		(68,424	)
Retained earnings		447,425			410,219
Accumulated other comprehensive income—foreign currency translation adjustment		(434	)		(991	)
Total Stockholders' Equity		523,070			486,145
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,038,711		$	909,113

See Notes to Unaudited Consolidated Financial Statements.

5

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended September 30,					Six Months Ended September 30,
	2020		2019			2020		2019
Net sales
Product	$	383,656	$	363,497		$	690,896	$	699,098
Services		49,425		48,068			97,216		93,839
Total		433,081		411,565			788,112		792,937
Cost of sales
Product		302,963		278,863			529,597		538,926
Services		31,156		29,671			60,996		58,341
Total		334,119		308,534			590,593		597,267
Gross profit		98,962		103,031			197,519		195,670
Selling, general, and administrative		66,889		70,523			136,356		136,310
Depreciation and amortization		3,341		3,557			6,857		7,020
Interest and financing costs		247		576			824		1,204
Operating expenses		70,477		74,656			144,037		144,534
Operating income		28,485		28,375			53,482		51,136
Other income (expense)		184		(40	)		282		(85	)
Earnings before tax		28,669		28,335			53,764		51,051
Provision for income taxes		8,823		8,237			16,558		14,765
Net earnings	$	19,846	$	20,098		$	37,206	$	36,286
Net earnings per common share—basic	$	1.48	$	1.51		$	2.79	$	2.72
Net earnings per common share—diluted	$	1.48	$	1.51		$	2.78	$	2.71
Weighted average common shares outstanding—basic		13,372		13,312			13,347		13,334
Weighted average common shares outstanding—diluted		13,391		13,350			13,394		13,408

See Notes to Unaudited Consolidated Financial Statements.

6

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended September 30,					Six Months Ended September 30,
	2020		2019			2020		2019
NET EARNINGS	$	19,846	$	20,098		$	37,206	$	36,286
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		520		(350	)		557		(613	)
Other comprehensive income (loss)		520		(350	)		557		(613	)
TOTAL COMPREHENSIVE INCOME	$	20,366	$	19,748		$	37,763	$	35,673

See Notes to Unaudited Consolidated Financial Statements.

7

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net earnings	$	37,206		$	36,286
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		9,460			10,077
Reserve for credit losses		1,766			631
Share-based compensation expense		3,648			4,054
Deferred taxes		1,032			(3	)
Payments from lessees directly to lenders—operating leases		(13	)		(34	)
Gain on disposal of property, equipment, and operaing lease equipment		(278	)		(436	)
Changes in:
Accounts receivable		1,755			(46,100	)
Inventories-net		(23,381	)		(5,301	)
Financing receivables—net		(54,386	)		(76,423	)
Deferred costs and other assets		(1,052	)		(18,826	)
Accounts payable-trade		21,717			15,585
Salaries and commissions payable, deferred revenue, and other liabilities		10,934			26,086
Net cash provided by (used in) operating activities		8,408			(54,404	)
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment		456			653
Purchases of property, equipment and operating lease equipment		(3,267	)		(4,888	)
Cash used in acquisitions, net of cash acquired		-			(13,815	)
Net cash used in investing activities		(2,811	)		(18,050	)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable		23,613			54,877
Repayments of non-recourse and recourse notes payable		(40,529	)		(5,629	)
Repurchase of common stock		(4,487	)		(13,692	)
Repayments of financing of acquisitions		(421	)		(785	)
Net borrowings on floor plan facility		91,554			13,585
Net cash provided by financing activities		69,730			48,356
Effect of exchange rate changes on cash		(477	)		114
Net increase (decrease) in cash and cash equivalents		74,850			(23,984	)
Cash and cash equivalents, beginning of period		86,231			79,816
Cash and cash equivalents, end of period	$	161,081		$	55,832

8

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)

	Six Months Ended September 30,
	2020			2019
Supplemental disclosures of cash flow information:
Cash paid for interest	$	739		$	1,115
Cash paid for income taxes	$	12,348		$	12,471
Cash paid for amounts included in the measurement of lease liabilities	$	2,975		$	2,566
Schedule of non-cash investing and financing activities:
Purchases of property, equipment, and operating lease equipment	$	(393	)	$	(396	)
Financing of acquisitions	$	-		$	(1,464	)
Borrowing of non-recourse and recourse notes payable	$	35,780		$	82,462
Repayments of non-recourse and recourse notes payable	$	(13	)	$	(34	)
Vesting of share-based compensation	$	7,916		$	8,972
New operating lease assets obtained in exchange for lease obligations	$	774		$	5,225

See Notes to Unaudited Consolidated Financial Statements.

9

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

	Six Months Ended September 30, 2020
	Common Stock					Additional Paid-In		Treasury			Retained		Accumulated Other Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income			Total
Balance, March 31, 2020		13,500		$	144	$	145,197	$	(68,424	)	$	410,219	$	(991	)	$	486,145
Issuance of restricted stock awards		91			1		-		-			-		-			1
Share-based compensation		-			-		1,885		-			-		-			1,885
Repurchase of common stock		(38	)		-		-		(2,703	)		-		-			(2,703	)
Net earnings		-			-		-		-			17,360		-			17,360
Foreign currency translation adjustment		-			-		-		-			-		37			37
Balance, June 30, 2020		13,553		$	145	$	147,082	$	(71,127	)	$	427,579	$	(954	)	$	502,725
Issuance of restricted stock awards		8			-		-		-			-		-			-
Share-based compensation		-			-		1,763		-			-		-			1,763
Repurchase of common stock		(24	)		-		-		(1,784	)		-		-			(1,784	)
Net earnings		-			-		-		-			19,846		-			19,846
Foreign currency translation adjustment		-			-		-		-			-		520			520
Balance, September 30, 2020		13,537		$	145	$	148,845	$	(72,911	)	$	447,425	$	(434	)	$	523,070

	Six Months Ended September 30, 2019
	Common Stock					Additional Paid-In		Treasury			Retained		Accumulated Other Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income			Total
Balance, March 31, 2019		13,611		$	143	$	137,243	$	(53,999	)	$	341,137	$	(271	)	$	424,253
Issuance of restricted stock awards		86			1		-		-			-		-			1
Share-based compensation		-			-		1,919		-			-		-			1,919
Repurchase of common stock		(188	)		-		-		(13,455	)		-		-			(13,455	)
Net earnings		-			-		-		-			16,188		-			16,188
Foreign currency translation adjustment		-			-		-		-			-		(263	)		(263	)
Balance, June 30, 2019		13,509		$	144	$	139,162	$	(67,454	)	$	357,325	$	(534	)	$	428,643
Issuance of restricted stock awards		7			-		-		-			-		-			-
Share-based compensation		(3	)		-		2,135		-			-		-			2,135
Repurchase of common stock		-			-		-		(237	)		-		-			(237	)
Net earnings		-			-		-		-			20,098		-			20,098
Foreign currency translation adjustment		-			-		-		-			-		(350	)		(350	)
Balance, September 30, 2019		13,513		$	144	$	141,297	$	(67,691	)	$	377,423	$	(884	)	$	450,289

See Notes to Unaudited Consolidated Financial Statements.

10

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional and managed services and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises in North America, the United Kingdom (“UK”), and other European countries.

BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses acquired are included in the unaudited consolidated financial statements from the dates of acquisition.

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the six months ended September 30, 2020, and 2019, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the six months ended September 30, 2020, and 2019 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2021, or any other future period. These unaudited consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2020 (“2020 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.

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

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 41% and 43% of our technology segment’s net sales for the three months ended September 30, 2020, and 2019, respectively, and 40% and 42% of our technology segment’s net sales for the six months ended September 30, 2020, and 2019, respectively.

SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2020, except for changes from the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update ("ASU") 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended (“ASU 2016-13”). The updates to our accounting policies from adopting ASU 2016-13 are provided below.

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We charge off uncollectable financing receivables when we stop pursuing collection.

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2. RECENT ACCOUNTING PRONOUNCEMENTS

CREDIT LOSSES — We adopted ASU 2016-13 on April 1, 2020. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Our adoption of this update, including the cumulative-effect adjustment to retained earnings, is not significant to our financial statements. Refer to Note 7, “Allowance for Credit Losses” for additional information.

3. REVENUES

Contract balances

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $41.3 million and $33.1 million of receivables from contracts with customers included within financing receivables as of September 30, 2020, and March 31, 2020, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

Contract liabilities	September 30, 2020		March 31, 2020
Current (included in deferred revenue)	$	58,267	$	54,486
Non-current (included in other liabilities)	$	18,794	$	16,395

Revenue recognized from the beginning contract liability balance was $11.3 million and $26.9 million for the three and six months ended September 30, 2020, respectively, and $13.6 million and $29.4 million for the three and six months ended September 30, 2019, respectively.

Performance obligations

The following table includes revenue expected to be recognized in the future related to performance obligations, primarily non-cancelable contracts for ePlus managed services, that are unsatisfied or partially unsatisfied at the end of the reporting period, (in thousands).

Remainder of Year ending March 31, 2021	$	20,527
Year Ending March 31, 2022		18,889
Year Ending March 31, 2023		8,385
Year Ending March 31, 2024		2,026
Year Ending March 31, 2025		516
Year Ending March 31, 2026 and thereafter		111
Total remaining performance obligations	$	50,454

The table does not include the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts where we recognize revenue at the amount that we have the right to invoice for services performed.

4. FINANCING RECEIVABLES AND OPERATING LEASES

Our financing receivables and operating leases consist primarily of leases of IT and communication equipment and notes receivable from financing customer purchases of third-party software, maintenance, and services. Our leases often include elections for the lessee to purchase the underlying asset at the end of the lease term. Occasionally, our leases provide the lessee a bargain purchase option.

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three and six months ended September 30, 2020, and 2019 (in thousands):

	Three months ended September 30, 2020		Three months ended September 30, 2019		Six months ended September 30, 2020		Six months ended September 30, 2019
Net sales	$	7,655	$	3,133	$	17,818	$	7,987
Cost of sales		5,402		2,702		10,729		6,652
Gross profit	$	2,253	$	431	$	7,089	$	1,335

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The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three and six months ended September 30, 2020, and 2019 (in thousands):

	Three months ended September 30 2020		Three months ended September 30, 2019		Six months ended September 30, 2020		Six months ended September 30, 2019
Interest income on sales-type leases	$	1,884	$	1,495	$	4,103	$	3,590
Lease income on operating leases	$	3,900	$	5,059	$	7,738	$	10,418

FINANCING RECEIVABLES—NET

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

September 30, 2020	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	90,002		$	76,700		$	166,702
Unguaranteed residual value (1)		-			20,213			20,213
Initial direct costs, net of amortization		364			-			364
Unearned income		-			(11,329	)		(11,329	)
Reserve for credit losses (2)		(1,337	)		(1,227	)		(2,564	)
Total, net	$	89,029		$	84,357		$	173,386
Reported as:
Current	$	52,397		$	40,369		$	92,766
Long-term		36,632			43,988			80,620
Total, net	$	89,029		$	84,357		$	173,386

(1) Includes unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable.

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

March 31, 2020	Notes Receivable			Lease Receivables			Financing Receivables
Minimum payments	$	55,417		$	69,492		$	124,909
Estimated unguaranteed residual value (1)		-			21,862			21,862
Initial direct costs, net of amortization		212			247			459
Unearned income		-			(11,612	)		(11,612	)
Reserve for credit losses (2)		(798	)		(610	)		(1,408	)
Total, net	$	54,831		$	79,379		$	134,210
Reported as:
Current	$	31,181		$	38,988		$	70,169
Long-term		23,650			40,391			64,041
Total, net	$	54,831		$	79,379		$	134,210

(1) Includes unguaranteed residual values of $14,972 thousand for sales type leases, which have been sold and accounted for as sales.

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

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The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of September 30, 2020 (in thousands):

Remainder of the Year ending March 31, 2021	$	46,006
Year Ending March 31, 2022		19,376
Year Ending March 31, 2023		8,196
Year Ending March 31, 2024		2,205
Year Ending March 31, 2025 and thereafter		917
Total	$	76,700

OPERATING LEASES—NET

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

	September 30, 2020			March 31, 2020
Cost of equipment under operating leases	$	19,578		$	21,276
Accumulated depreciation		(12,272	)		(11,159	)
Investment in operating lease equipment—net (1)	$	7,306		$	10,117

(1) Amounts include estimated unguaranteed residual values of $2.5 million and $3.1 million as of September 30, 2020, and March 31, 2020, respectively.

The following table provides the future scheduled minimum lease rental payments for operating leases as of September 30, 2020 (in thousands):

Remainder of the Year ending March 31, 2021	$	1,534
Year Ending March 31, 2022		1,927
Year Ending March 31, 2023		1,436
Year Ending March 31, 2024		477
Year Ending March 31, 2025 and thereafter		35
Total	$	5,409

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for as sales or secured borrowings.

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of September 30, 2020, and March 31, 2020, we had financing receivables of $33.7 million and $34.6 million, respectively, and operating leases of $4.9 million and $6.7 million, respectively, which were collateral for non-recourse notes payable. See Note 9, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. During the three months ended September 30, 2020, and 2019, we recognized net gains of $4.5 million and $4.1 million, respectively, and total proceeds from these sales were $118.5 million and $95.1 million, respectively. For the year to date periods ended September 30, 2020, and 2019, we recognized net gains of $7.0 million and $7.5 million, respectively, and total proceeds from these sales were $191.7 million and $172.0 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the services. As of both September 30, 2020, and March 31, 2020, we had deferred revenue of $0.4 million for servicing obligations.

In a limited number of transfers accounted for as sales, we indemnified the assignee in the event that the lessee elected to early terminate the lease. As of September 30, 2020, our maximum potential future payments related to such guarantees is immaterial. We believe the likelihood of making any such payments to be remote.

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5. LESSEE ACCOUNTING

We lease office space for periods up to 6 years. We recognize our right-of-use assets as part of property, equipment and other assets. We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities, respectively. We recognized rent expense of $1.5 million as part of selling, general, and administrative expenses for both the three months ended September 30, 2020, and September 30, 2019, and $3.1 million for both the six months ending September 30, 2020, and September 30, 2019.

The following table provides supplemental information about the remaining lease terms and discount rates applied as of September 30, 2020, and March 31, 2020:

Lease term and Discount Rate	September 30, 2020			March 31, 2020
Weighted average remaining lease term (months)		34			38
Weighted average discount rate		3.8	%		3.9	%

The following table provides our future lease payments under our operating leases as of September 30, 2020 (in thousands):

	September 30, 2020
Remainder of the year ending March 31, 2021	$	2,432
Year ending March 31, 2022		4,319
Year ending March 31, 2023		3,093
Year ending March 31, 2024		1,249
Year ending March 31, 2025 and thereafter		813
Total lease payments	$	11,906
Less: interest		(617	)
Present value of lease liabilities	$	11,289

6. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The carrying value of goodwill was $118.2 and $118.1 million as of September 30, 2020, and March 31, 2020, respectively. There was no significant activity in the balance during the six months ended September 30, 2020, other than change in foreign currency translation of $0.1 million.

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations. Our entire balance as of September 30, 2020, and March 31, 2020, relates to our technology reportable segment, which we also determined to be one reporting unit.

We test goodwill for impairment on an annual basis, as of the first day of our third fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value.

In our annual test as of October 1, 2019, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our technology reporting unit continued to substantially exceed its carrying value.

During the fourth quarter of fiscal year 2020, we determined that the uncertainty associated with the economic environment stemming from the COVID-19 pandemic was a triggering event and we elected to perform a quantitative goodwill impairment test. We concluded that the fair value of our technology reporting unit substantially exceeded its carrying value as of March 31, 2020. Our conclusions would not be impacted by a ten percent change in our estimate of the fair value of the reporting unit.

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OTHER INTANGIBLE ASSETS

Our other intangible assets consist of the following on September 30, 2020, and March 31, 2020 (in thousands):

	September 30, 2020							March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships & other intangibles	$	63,093	$	(37,467	)	$	25,626	$	63,006	$	(33,000	)	$	30,006
Capitalized software development		11,176		(6,537	)		4,639		10,385		(5,927	)		4,458
Total	$	74,269	$	(44,004	)	$	30,265	$	73,391	$	(38,927	)	$	34,464

Customer relationships and other intangibles are generally amortized between 5 to 10 years. Capitalized software development is generally amortized over 5 years.

Total amortization expense for other intangible assets was $2.5 million for both the three months ended September 30, 2020, and 2019, respectively, and $5.0 million and $4.9 million for the six months ended September 30, 2020, and 2019, respectively.

7. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the six months ended September 30, 2020, and 2019 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2020	$	1,781		$	798		$	610		$	3,189
Provision for credit losses		576			566			624			1,766
Write-offs and other		(27	)		(27	)		(7	)		(61	)
Balance September 30, 2020	$	2,330		$	1,337		$	1,227		$	4,894

	Accounts Receivable			Notes Receivable		Lease Receivables			Total
Balance April 1, 2019	$	1,579		$	505	$	530		$	2,614
Provision for credit losses		311			15		(27	)		299
Write-offs and other		(42	)		-		(3	)		(45	)
Balance September 30, 2019	$	1,848		$	520	$	500		$	2,868

The following table provides our allowance for credit losses and minimum payments associated with our notes receivables and lease-related receivables disaggregated based on our impairment method as of March 31, 2020 (in thousands):

	March 31, 2020
	Notes Receivable		Lease Receivables
Allowance for credit losses:
Ending balance: collectively evaluated for impairment	$	736	$	610
Ending balance: individually evaluated for impairment		62		-
Ending balance	$	798	$	610
Minimum payments:
Ending balance: collectively evaluated for impairment	$	55,005	$	69,492
Ending balance: individually evaluated for impairment		412		-
Ending balance	$	55,417	$	69,492

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We evaluate our customers using an internally assigned credit quality rating (“CQR”):

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

• Average CQR: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Loss rates in this category are generally in the range of 2% to 10%.

• Low CQR: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. The loss rates in this category in the normal course are generally in the range of 10% to 100%.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of September 30, 2020 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2021		2020		2019		2018		2017		2016 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	64,678	$	9,744	$	2,434	$	947	$	38	$	-	$	77,841	$	(35,867	)	$	41,974
Average CQR		6,189		4,697		837		52		-		-		11,775		(3,651	)		8,124
Low CQR		-		-		324		-		-		62		386		-			386
Total	$	70,867	$	14,441	$	3,595	$	999	$	38	$	62	$	90,002	$	(39,518	)	$	50,484
Lease receivables:
High CQR	$	21,650	$	11,826	$	3,609	$	998	$	314	$	8	$	38,405	$	(9,518	)	$	28,887
Average CQR		22,447		9,415		1,921		646		106		-		34,535		(11,409	)		23,126
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	44,097	$	21,241	$	5,530	$	1,644	$	420	$	8	$	72,940	$	(20,927	)	$	52,013
Total amortized cost (1)	$	114,964	$	35,682	$	9,125	$	2,643	$	458	$	70	$	162,942	$	(60,445	)	$	102,497

(1) Unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $364 thousand are excluded from amortized cost.

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

The following table provides an aging analysis of our financing receivables as of September 30, 2020 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	925	$	270	$	823	$	2,018	$	10,105	$	12,123	$	77,879	$	90,002
Lease receivables		660		2,049		1,771		4,480		1,754		6,234		66,706		72,940
Total	$	1,585	$	2,319	$	2,594	$	6,498	$	11,859	$	18,357	$	144,585	$	162,942

The following table provides an aging analysis of our lease receivables by CQR as of March 31, 2020 (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
High CQR	$	951	$	105	$	922	$	1,978	$	1,181	$	33,581	$	36,740	$	(4,766	)	$	(19,823	)	$	12,151
Average CQR		46		107		112		265		1,106		31,381		32,752		(3,646	)		(18,693	)		10,413
Low CQR		-		-		-		-		-		-		-		-			-			-
Total	$	997	$	212	$	1,034	$	2,243	$	2,287	$	64,962	$	69,492	$	(8,412	)	$	(38,516	)	$	22,564

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The following table provides an aging analysis of our notes receivable by CQR as of March 31, 2020 (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
High CQR	$	1,332	$	2	$	280	$	1,614	$	2,878	$	29,057	$	33,549	$	(18,341	)	$	15,208
Average CQR		140		44		142		326		1,135		19,995		21,456		(16,636	)		4,820
Low CQR		63		-		152		215		-		197		412		-			412
Total	$	1,535	$	46	$	574	$	2,155	$	4,013	$	49,249	$	55,417	$	(34,977	)	$	20,440

Our financial assets on nonaccrual status were not significant as of September 30, 2020, and March 31, 2020.

8. PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

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

	September 30, 2020		March 31, 2020
Other current assets:
Deposits & funds held in escrow	$	339	$	926
Prepaid assets		7,640		7,946
Other		254		384
Total	$	8,233	$	9,256
Property, equipment and other assets
Property and equipment, net	$	7,258	$	7,153
Deferred costs - non-current		12,568		10,957
Right-of-use assets		11,069		13,066
Other		3,419		1,420
Total	$	34,314	$	32,596
Other current liabilities:
Accrued expenses	$	10,639	$	10,024
Accrued income taxes payable		3,021		406
Contingent consideration - current		-		220
Short-term lease liability		4,698		4,815
Other		7,014		7,521
Total	$	25,372	$	22,986
Other liabilities:
Deferred revenue	$	19,074	$	16,693
Long-term lease liability		6,590		8,326
Other		7,278		2,708
Total	$	32,942	$	27,727

In the above table, deposits and funds held in escrow relate to financial assets that were sold to third-party banks. In conjunction with those sales, a portion of the proceeds was placed in escrow and will be released to us upon payment of outstanding invoices related to the underlying financing arrangements that were sold.

9. CREDIT FACILITY AND NOTES PAYABLE

Credit Facility

Within our technology segment, ePlus Technology, inc. and certain of its subsidiaries finance their operations with funds generated from operations, and with a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). This facility provides short-term capital for our technology segment. There are two components of the WFCDF credit facility: (1) a floor plan component and (2) an accounts receivable component.

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Under the floor plan component, we had outstanding balances of $219.0 million and $127.4 million as of September 30, 2020, and March 31, 2020, respectively, and are presented as accounts payable – floorplan. The fair value of the outstanding balance under the credit facility was equal to its carrying value as of September 30, 2020, and March 31, 2020.

On May 15, 2020, we executed an amendment to the WFCDF credit facility that increased the aggregate limit of the two components, except during a temporary uplift, to $275.0 million. Additionally, we have an election to temporarily increase the aggregate limit to $350.0 million for a period of not less than 30 days, provided that all such periods shall not exceed 150 days in the aggregate in any calendar year. Further, the amendment increased the limit on the accounts receivable component of the WFCDF credit facility to $100.0 million, changed the interest rate to two percent (2.00%) plus the greater of one month LIBOR or seventy-five hundredths of one percent (0.75%), and modified certain restrictions on ePlus Technology, inc.’s ability to pay dividends to ePlus inc.

As of September 30, 2020, the limit of the two components of the credit facility was $275 million, and the accounts receivable component had a sub-limit of $100 million. Under the accounts receivable component, we had no outstanding balance as of September 30, 2020 and $35 million outstanding as of March 31, 2020. The accounts receivable component is presented as recourse notes payable – current.

The WFCDF credit facility is secured by the assets of ePlus Technology, inc. and certain of its subsidiaries, and varies available borrowing based upon the value of their receivables and inventory. Additionally, the credit facility requires a guaranty of $10.5 million by ePlus inc.

The credit facility restricts the ability of ePlus Technology, inc. and certain of its subsidiaries to pay dividends to ePlus inc. unless their available borrowing meets certain thresholds. As of September 30, 2020, their available borrowing met the threshold such that there were no restricted net assets of ePlus Technology, inc.

The credit facility requires that financial statements of ePlus Technology, inc. and certain of its subsidiaries be provided within 45 days of each quarter and 90 days of each fiscal year end, and requires that other operational reports be provided on a regular basis. Either party may terminate with 90 days’ advance notice.

The loss of the WFCDF credit facility, including during circumstances related to COVID-19, 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.

On October 1, 2020, we elected to exercise the temporary increase in the aggregate limit of the WFCDF credit facility to $350.0 million for a period of  30 days.

Recourse Notes Payable

Recourse notes payable consist of borrowings that, in the event of default, the lender has recourse against us in addition to the assets serving as collateral.

As of September 30, 2020, and March 31, 2020, we had $2.3 million of recourse borrowings that were collateralized by investments in notes receivable and leases. Our principal and interest payments are generally due monthly in amounts that 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 these borrowings was 2.55% as of both September 30, 2020, and March 31, 2020.

Non-recourse Notes Payable

Non-recourse notes payable consists of borrowings that, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us. As of September 30, 2020, and March 31, 2020, we had $38.1 million and $35.5 million, respectively, of non-recourse borrowings that were collateralized by investments in notes and leases. Principal and interest payments 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 3.15% and 3.84%, as of September 30, 2020, and March 31, 2020, respectively.

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10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company may be involved in routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate amount of liability, if any, for any claims of any type (either alone or in the aggregate) may materially and adversely affect the Company’s financial condition, results of operations and liquidity. In addition, the ultimate outcome of any litigation is uncertain. Any outcome, whether favorable or unfavorable, may materially and adversely affect the Company due to legal costs and expenses, diversion of management attention and other factors. The Company expenses legal costs in the period incurred. The Company cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against the Company in the future, and these matters could relate to prior, current or future transactions or events.

11. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during each period.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three and six months ended September 30, 2020, and 2019, respectively (in thousands, except per share data).

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Net earnings attributable to common shareholders - basic and diluted	$	19,846	$	20,098	$	37,206	$	36,286
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		13,372		13,312		13,347		13,334
Effect of dilutive shares		19		38		47		74
Weighted average shares common outstanding — diluted		13,391		13,350		13,394		13,408
Earnings per common share - basic	$	1.48	$	1.51	$	2.79	$	2.72
Earnings per common share - diluted	$	1.48	$	1.51	$	2.78	$	2.71

12. STOCKHOLDERS’ EQUITY

Share Repurchase Plan

On May 24, 2019, our board of directors authorized the repurchase of up to 500,000 shares of our outstanding common stock over a 12-month period beginning on May 28, 2019, and ending on May 27, 2020. 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.

On May 20, 2020, our board of directors authorized the repurchase of up to 500,000 shares of our outstanding common stock over a 12-month period beginning on May 28, 2020, and ending on May 27, 2021. 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, 2020, we purchased 24,318 shares of our outstanding common stock at a value of $1.8 million under the share repurchase plan; we also purchased 37,640 shares of common stock at a value of $2.7 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

During the six months ended September 30, 2019, we purchased 149,044 shares of our outstanding common stock at a value of $10.7 million under the share repurchase plan; we also purchased 41,817 shares of common stock at a value of $3.0 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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13. SHARE-BASED COMPENSATION

Share-Based Plans

As of September 30, 2020, we had share-based awards outstanding under the following plans: (1) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”), and (2) the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"). These 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.

Restricted Stock Activity

For the six months ended September 30, 2020, we granted 9,309 restricted shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2019, we granted 8,132 restricted shares under the 2017 Director LTIP, and 85,132 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, 2020		193,580		$	73.74
Granted		99,182		$	71.81
Vested		(110,155	)	$	70.00
Forfeited		-		$	-
Nonvested September 30, 2020		182,607		$	74.95

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. For the six months ended September 30, 2020, the Company withheld 37,640 shares of common stock at a value of $2.7 million, which was included in treasury stock.

Compensation Expense

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2020, and 2019, we recognized $1.8 million and $2.1 million of total share-based compensation expense, respectively. During the six months ended September 30, 2020, and 2019, we recognized $3.6 million and $4.1 million of total share-based compensation expense, respectively. Unrecognized compensation expense related to non-vested restricted stock was $11.6 million as of September 30, 2020, which will be fully recognized over the next 33 months.

We also provide our employees with a contributory 401(k) profit sharing plan, to which we may contribute from time to time at our sole discretion. Employer contributions to the plan are fully vested at all times. Our estimated contribution expense for the plan for both the three months ended September 30, 2020, and 2019, was $0.7 million, and $1.4 million for both the six months ended September 30, 2020, and 2019.

14. INCOME TAXES

We account for our tax positions in accordance with Codification Topic 740, Income Taxes. Under the guidance, we evaluate uncertain tax positions based on the two-step approach. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. For tax positions that are not likely of  being sustained upon audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50 percent likely of being realized upon ultimate settlement.

Our total gross unrecognized tax benefits recorded for uncertain income tax, and interest and penalties thereon, were negligible as of September 30, 2020, and September 30, 2019. We had no additions or reductions to our gross unrecognized tax benefits during the six months ended September 30, 2020. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

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15. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with Codification Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2020 and March 31, 2020 (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, 2020
Assets:
Money market funds	$	45,132	$	45,132	$	-	$	-
March 31, 2020
Assets:
Money market funds	$	128	$	128	$	-	$	-
Liabilities:
Contingent consideration	$	220	$	-	$	-	$	220

For the three and six months ended September 30, 2020, we did not record significant adjustments to our liability for contingent consideration arising from a past business combination. In August 2020, we paid $219 thousand to fully satisfy the obligations of our contingent consideration arrangement.

For the three and six months ended September 30, 2019, we recorded adjustments to operating expenses of $1.1 million and $1.5 million, respectively, that increased our liability for contingent consideration arising from our past business combinations. In September 2019, we reached a settlement in full of one of our contingent consideration arrangements in the amount of $9.6 million, that was paid in October 2019. Additionally, in September 2019, we paid $0.5 million to satisfy certain current obligations in another of these arrangements.

16. BUSINESS COMBINATIONS

ABS Technology

On August 23, 2019, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of ABS Technology, a Virginia Beach, Virginia- headquartered solutions provider with deep expertise in managed services, networking, collaboration, and security solutions. ABS Technology enhances ePlus’ existing solutions portfolio and market position in Richmond and southern Virginia.

Our sum of consideration transferred was $15.3 million consisting of $13.8 million paid in cash at closing plus $1.7 million that was paid primarily during the year ended March 31, 2020, upon the collection of certain accounts receivable and less $0.2 million that was repaid to us in December 2019 due to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	Acquisition Date Amount
Accounts receivable		9,208
Other assets		743
Identified intangible assets		5,720
Accounts payable and other current liabilities		(6,715	)
Performance obligation		(1,140	)
Total identifiable net assets		7,816
Goodwill		7,461
Total purchase consideration	$	15,277

The identified intangible assets of $5.7 million consist of customer relationships with an estimated useful life of seven (7) years. The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables.

We recognized goodwill related to this transaction of $7.5 million, which was assigned to our technology reporting unit. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill is expected to be deductible for tax purposes. The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2019, is not material.

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17. SEGMENT REPORTING

Our operations are conducted through two operating segments that are also both reportable segments. Our technology segment includes sales of IT products, third-party software, third-party maintenance, advanced professional and managed services, and our proprietary software to commercial enterprises, state and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors. We measure the performance of the segments based on operating income.

Our reportable segment information for the three- and six-month periods ended September 30, 2020, and 2019 are summarized in the following tables (in thousands):

	Three Months Ended
	September 30, 2020						September 30, 2019
	Technology		Financing		Total		Technology		Financing		Total
Sales
Product	$	369,934	$	13,722	$	383,656	$	349,650	$	13,847	$	363,497
Service		49,425		-		49,425		48,068		-		48,068
Net sales		419,359		13,722		433,081		397,718		13,847		411,565
Cost of Sales
Product		301,006		1,957		302,963		276,475		2,388		278,863
Service		31,156		-		31,156		29,671		-		29,671
Total cost of sales		332,162		1,957		334,119		306,146		2,388		308,534
Gross Profit		87,197		11,765		98,962		91,572		11,459		103,031
Selling, general, and administrative		62,586		4,303		66,889		67,189		3,334		70,523
Depreciation and amortization		3,313		28		3,341		3,529		28		3,557
Interest and financing costs		1		246		247		-		576		576
Operating expenses		65,900		4,577		70,477		70,718		3,938		74,656
Operating income		21,297		7,188		28,485		20,854		7,521		28,375
Other income						184						(40	)
Earnings before tax					$	28,669					$	28,335
Net Sales
Contracts with customers	$	412,357	$	1,028	$	413,385	$	394,585	$	1,411	$	395,996
Financing and other		7,002		12,694		19,696		3,133		12,436		15,569
Net Sales	$	419,359	$	13,722	$	433,081	$	397,718	$	13,847	$	411,565
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	3,499	$	1,182	$	4,681	$	3,658	$	1,455	$	5,113
Purchases of property, equipment and operating lease equipment	$	990	$	-	$	990	$	1,426	$	1,944	$	3,370
Selected Financial Data - Balance Sheet
Total assets	$	812,633	$	226,078	$	1,038,711	$	690,648	$	223,618	$	914,266

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	Six Months Ended
	September 30, 2020						September 30, 2019
	Technology		Financing		Total		Technology		Financing		Total
Sales
Product	$	663,367	$	27,529	$	690,896	$	672,414	$	26,684	$	699,098
Service		97,216		-		97,216		93,839		-		93,839
Net sales		760,583		27,529		788,112		766,253		26,684		792,937
Cost of Sales
Product		525,549		4,048		529,597		534,529		4,397		538,926
Service		60,996		-		60,996		58,341		-		58,341
Total cost of sales		586,545		4,048		590,593		592,870		4,397		597,267
Gross Profit		174,038		23,481		197,519		173,383		22,287		195,670
Selling, general, and administrative		128,142		8,214		136,356		129,856		6,454		136,310
Depreciation and amortization		6,801		56		6,857		6,936		84		7,020
Interest and financing costs		266		558		824		-		1,204		1,204
Operating expenses		135,209		8,828		144,037		136,792		7,742		144,534
Operating income		38,829		14,653		53,482		36,591		14,545		51,136
Other income						282						(85	)
Earnings before tax					$	53,764					$	51,051
Net Sales
Contracts with customers	$	746,344	$	1,988	$	748,332	$	758,266	$	2,200	$	760,466
Financing and other		14,239		25,541		39,780		7,987		24,484		32,471
Net Sales	$	760,583	$	27,529	$	788,112	$	766,253	$	26,684	$	792,937
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	7,133	$	2,327	$	9,460	$	7,283	$	2,794	$	10,077
Purchases of property, equipment and operating lease equipment	$	3,101	$	166	$	3,267	$	2,675	$	2,213	$	4,888
Selected Financial Data - Balance Sheet
Total assets	$	812,633	$	226,078	$	1,038,711	$	690,648	$	223,618	$	914,266

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Technology Segment Disaggregation of Revenue

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized for the three and six month periods ended September 30, 2020, and 2019 in the tables below (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Customer end market:
Technology	$	76,321		$	97,502		$	146,288		$	173,682
Telecom, Media & Entertainment		96,927			71,044			153,579			133,510
Financial Services		46,732			44,605			94,153			92,847
State and local government and educational institutions		76,492			71,866			147,055			143,057
Healthcare		59,252			59,818			105,788			115,926
All others		63,635			52,883			113,720			107,231
Net sales		419,359			397,718			760,583			766,253
Less: Revenue from financing and other		(7,002	)		(3,133	)		(14,239	)		(7,987	)
Revenue from contracts with customers	$	412,357		$	394,585		$	746,344		$	758,266

	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Vendor
Cisco Systems	$	173,166		$	172,605		$	301,098		$	318,786
NetApp		9,914			9,771			25,335			23,198
HP Inc. & HPE		16,395			18,986			33,433			42,099
Dell EMC		15,349			12,494			46,430			26,275
Arista Networks		13,443			26,766			20,263			47,716
Juniper Networks		24,716			24,370			38,295			31,424
All others		166,376			132,726			295,729			276,755
Net sales		419,359			397,718			760,583			766,253
Less: Revenue from financing and other		(7,002	)		(3,133	)		(14,239	)		(7,987	)
Revenue from contracts with customers	$	412,357		$	394,585		$	746,344		$	758,266

Financing Segment Disaggregation of Revenue

We analyze our revenues within our financing segment based on the nature of the arrangement, and our revenues from contracts with customers consist of proceeds from the sale of off-lease equipment.

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

This discussion is intended to further the reader’s understanding of our consolidated financial condition and results of operations. It should be read in conjunction with the financial statements included in this quarterly report on Form 10-Q and our 2020 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 2020 Annual Report., and in Part II, Item 1A. “Risk Factors” in this Report.

EXECUTIVE OVERVIEW

Business Description

We are a leading solutions provider that delivers actionable outcomes for organizations by using IT and consulting solutions to drive business agility and innovation. Leveraging our engineering talent, we assess, plan, deliver, and secure solutions comprised of leading technologies and consumption models aligned with our customers’ needs. Our expertise and experience enable ePlus to craft optimized solutions that take advantage of the cost, scale and efficiency of private, public and hybrid cloud in an evolving market. We also provide consulting, staffing, professional, managed, IT staff augmentation, and complete lifecycle management services including flexible financing and solutions in the areas of security, cloud, networking, data center, collaboration and emerging technologies. We have been in the business of selling, leasing, financing, and managing IT and other assets for more than 30 years.

Our primary focus is to deliver integrated solutions that address our customers’ business needs, leveraging the appropriate technologies, both on-premise and in the cloud. Our approach is to lead with advisory consulting to understand our customers’ needs, design, deploy and manage solutions aligned to their objectives. Underpinning the broader areas of Cloud, Security, Networking, Data Center and Collaboration are specific skills in orchestration and automation, application modernization, DevOps, data management, data visualization, analytics, network modernization, edge compute and other advanced and emerging technologies. These solutions are comprised of class leading technologies from partners such as Amazon Web Services, Arista Networks, Blue Coat, Check Point, Cisco Systems, Citrix, Commvault, Dell EMC, Extreme Networks, F5 Networks, Fortinet, Gigamon, HPE, Juniper Networks, Lenovo, Microsoft, NetApp, Nutanix, NVIDIA, Oracle, Palo Alto Networks, Proofpoint, Pure Storage, Qumulo, Rubrik, Splunk, Symantec 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 hosted, proprietary software solutions are focused on giving our customers more control over their IT supply chain, by automating and optimizing the procurement and management of their owned, leased, and consumption-based assets.

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

Our go-to-market strategy focuses primarily on diverse end-markets for middle market to large enterprises. For the trailing twelve-month period ended September 30, 2020, the percentage of revenue by customer end market within our technology segment includes technology industry 19%, telecommunications, media and entertainment 20%, state and local government and educational institutions (“SLED”) 16%, healthcare 15%, and financial services 13%. The majority of our sales were generated within the United States (“US”); however, we have the ability to support our customers nationally and internationally, including physical locations in the United Kingdom (“UK”) and India. Our technology segment accounts for 97% of our net sales, and 73% of our operating income, while our financing segment accounts for 3% of our net sales, and 27% of our operating income, for the six months ended September 30, 2020.

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Impact of COVID-19 on Our Business Operations

The COVID-19 pandemic continues to have widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Federal, state and local governments and public health authorities have required and may in the future require measures to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings, work from home, supply chain logistical changes, and closure of non-essential businesses.

As COVID-19 impacts continue to expand across the country and globe, we have been adjusting our business activities for the safety of our employees and to best serve our customers in this rapidly evolving environment. We have implemented a flexible work from home strategy applicable to all offices and operational continuity plans to provide sufficient resources to continue supporting our customers. For employees who wish to return to the office, we have reopened our headquarters with limited capacity and required health and safety protocols in place. We plan to reopen our other offices using a phased approach but currently have not set a schedule to do so. Our configuration centers have remained open with our employees working in them following required health and safety protocols. In addition, we also have a procedure to review and approve employees’ business-related travel. Our managed service teams are distributed across the US with the ability to leverage technology to provide coverage while working from home. While we and many of our customers and vendor partners have restricted travel, we are leveraging video and other collaborative tools to continue to be responsive.

Our account relationship teams are actively engaging with our customers, to ensure they have the support needed in adjusting to changes in the business environment and government directives. In addition, we granted a limited number of customers temporary payment term extensions. Also, we are working closely with our vendor partners to address varying impacts on their supply chain to satisfy infrastructure needs. Certain of our vendor partners extended payment terms to us and our competitors.

We continue to execute against and adjust our business continuity plans to maximize our ability to support our employees and customers in concert with our partners. We have an internal resource page to support specific customer inquiries from security to collaboration to financing options. We remain committed to driving positive business outcomes.

The extent to which the COVID-19 pandemic impacts our business going forward will depend on numerous evolving factors we cannot reliably predict, including the duration and scope of the pandemic; governmental, business, and individuals' actions in response to the pandemic; and the impact on economic activity including the possibility of recession or financial market instability. These factors may adversely impact business, and government spending on technology as well as our customers' ability to pay for our products and services on an ongoing basis. This uncertainty also affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions. Refer to Part I, Item 1A, “Risk Factors,” in our 2020 Annual Report.

Key Business Metrics

Our management monitors a number of financial and non-financial measures and ratios on a regular basis to track the progress of our business. We believe that the most important of these measures and ratios include net sales, gross margin, operating income margin, net earnings, net earnings per common share, adjusted EBITDA, adjusted EBITDA margin, adjusted gross billings, and non-GAAP net earnings per share. We use a variety of operating and other information to evaluate the operating performance of our business, develop financial forecasts, make strategic decisions, and prepare and approve annual budgets.

These key indicators include financial information that is prepared in accordance with US GAAP and presented in our unaudited condensed consolidated financial statements as well as non-GAAP performance measurement tools. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are not normally included in the most directly comparable measure calculated and presented in accordance with US GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

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Our key business metrics for the three- and six-month periods ended September 30, 2020, and 2019 are summarized in the following tables (dollars in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
Consolidated	2020			2019			2020			2019
Net sales	$	433,081		$	411,565		$	788,112		$	792,937
Gross profit	$	98,962		$	103,031		$	197,519		$	195,670
Gross margin		22.9	%		25.0	%		25.1	%		24.7	%
Operating income margin		6.6	%		6.9	%		6.8	%		6.4	%
Net earnings	$	19,846		$	20,098		$	37,206		$	36,286
Net earnings margin		4.6	%		4.9	%		4.7	%		4.6	%
Net earnings per common share - diluted	$	1.48		$	1.51		$	2.78		$	2.71
Non-GAAP: Net earnings (1)	$	22,470		$	24,228		$	42,677		$	43,687
Non-GAAP: Net earnings per common share - diluted (1)	$	1.68		$	1.81		$	3.19		$	3.26
Adjusted EBITDA (2)	$	33,561		$	35,405		$	64,275		$	63,972
Adjusted EBITDA margin		7.7	%		8.6	%		8.2	%		8.1	%
Purchases of property and equipment used internally	$	990		$	1,426		$	3,101		$	2,675
Purchases of equipment under operating leases		-			1,944			166			2,213
Total capital expenditures	$	990		$	3,370		$	3,267		$	4,888
Technology Segment
Net sales	$	419,359		$	397,718		$	760,583		$	766,253
Adjusted gross billings (3)	$	601,064		$	579,084		$	1,147,458		$	1,127,447
Gross profit	$	87,197		$	91,572		$	174,038		$	173,383
Gross margin		20.8	%		23.0	%		22.9	%		22.6	%
Operating income	$	21,297		$	20,854		$	38,829		$	36,591
Adjusted EBITDA (2)	$	26,275		$	27,789		$	49,436		$	49,208
Financing Segment
Net sales	$	13,722		$	13,847		$	27,529		$	26,684
Gross profit	$	11,765		$	11,459		$	23,481		$	22,287
Operating Income	$	7,188		$	7,521		$	14,653		$	14,545
Adjusted EBITDA (2)	$	7,286		$	7,616		$	14,839		$	14,764

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

We use non-GAAP net earnings per common share as a supplemental measure of our performance to gain insight into our operating performance. We believe that the exclusion of other income (expense), share-based compensation, and acquisition-related amortization expense in calculating non-GAAP net earnings per common share provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that non-GAAP net earnings per common share provide useful information to investors and others to understand and evaluate our operating results. However, our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies, including companies in our industry, might calculate similar non-GAAP net earnings and non-GAAP net earnings per common share 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,
	2020			2019		2020			2019
GAAP: Earnings before tax	$	28,669		$	28,335	$	53,764		$	51,051
Share based compensation		1,764			2,135		3,671			4,077
Acquisition and integration expense		(30	)		1,338		(1	)		1,739
Acquisition related amortization expense		2,172			2,345		4,400			4,532
Other (income) expense		(184	)		40		(282	)		85
Non-GAAP: Earnings before provision for income taxes		32,391			34,193		61,552			61,484
GAAP: Provision for income taxes		8,823			8,237		16,558			14,765
Share based compensation		541			624		1,128			1,183
Acquisition and integration expense		(9	)		391		-			506
Acquisition related amortization expense		648			663		1,315			1,270
Other (income) expense		(56	)		12		(86	)		25
Tax (expense) benefit on restricted stock		(26	)		38		(40	)		48
Non-GAAP: Provision for income taxes		9,921			9,965		18,875			17,797
Non-GAAP: Net earnings	$	22,470		$	24,228	$	42,677		$	43,687
GAAP: Net earnings per common share - diluted	$	1.48		$	1.51	$	2.78		$	2.71
Non-GAAP: Net earnings per common share - diluted	$	1.68		$	1.81	$	3.19		$	3.26

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020			2019
GAAP: Net earnings per common share - diluted	$	1.48	$	1.51	$	2.78		$	2.71
Share based compensation		0.09		0.11		0.19			0.22
Acquisition and integration expense		-		0.07		-			0.09
Acquisition related amortization expense		0.11		0.12		0.23			0.24
Other (income) expense		-		-		(0.01	)		-
Tax benefit on restricted stock		-		-		-			-
Total non-GAAP adjustments - net of tax		0.20		0.30		0.41			0.55
Non-GAAP: Net earnings per common share - diluted	$	1.68	$	1.81	$	3.19		$	3.26

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

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 business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that adjusted EBITDA and adjusted EBITDA margin provide useful information to investors and others to understand and evaluate 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 a comparative measure.

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	Three Months Ended September 30,					Six Months Ended September 30,
Consolidated	2020			2019		2020			2019
Net earnings	$	19,846		$	20,098	$	37,206		$	36,286
Provision for income taxes		8,823			8,237		16,558			14,765
Share based compensation		1,764			2,135		3,671			4,077
Interest and financing costs		1			-		266			-
Acquisition and integration expense		(30	)		1,338		(1	)		1,739
Depreciation and amortization		3,341			3,557		6,857			7,020
Other (income) expense		(184	)		40		(282	)		85
Adjusted EBITDA	$	33,561		$	35,405	$	64,275		$	63,972
Technology Segment
Operating income	$	21,297		$	20,854	$	38,829		$	36,591
Depreciation and amortization		3,313			3,529		6,801			6,936
Share based compensation		1,694			2,068		3,541			3,942
Interest and financing costs		1			-		266			-
Acquisition and integration expense		(30	)		1,338		(1	)		1,739
Adjusted EBITDA	$	26,275		$	27,789	$	49,436		$	49,208
Financing Segment
Operating income	$	7,188		$	7,521	$	14,653		$	14,545
Depreciation and amortization		28			28		56			84
Share based compensation		70			67		130			135
Adjusted EBITDA	$	7,286		$	7,616	$	14,839		$	14,764

(3) We define adjusted gross billings as our technology segment net sales calculated in accordance with US GAAP, adjusted to exclude the costs incurred related to sales of third-party maintenance, software assurance and subscription/SaaS licenses, and services. We have provided below a reconciliation of adjusted gross billings to technology segment net sales, which is the most directly comparable financial measure to this non-GAAP financial measure. The presentation of adjusted gross billings has been updated to align with net sales for our technology segment.

We use adjusted gross billings as a supplemental measure of our performance to gain insight into the volume of business generated by our technology segment, and to analyze the changes to our accounts receivable and accounts payable. Our use of adjusted gross billings as an analytical tool has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate adjusted gross billings or a similarly titled measure differently, which may reduce its usefulness as a comparative measure.

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Technology segment net sales	$	419,359	$	397,718	$	760,583	$	766,253
Costs incurred related to sales of third party maintenance, software assurance and subscription/Saas licenses, and services		181,705		181,366		386,875	$	361,194
Adjusted gross billings	$	601,064	$	579,084	$	1,147,458	$	1,127,447

Consolidated Results of Operations

During the three months ended September 30, 2020, net sales increased 5.2%, or $21.5 million, to $433.1 million, as compared to $411.6 million for the same period in the prior fiscal year. Product sales for the three months ended September 30, 2020, increased 5.5% to $383.7 million, or an increase of $20.2 million from $363.5 million in the same period in the prior year. Services sales during the three months ended September 30, 2020, increased 2.8% to $49.4 million, or an increase of $1.4 million over prior year services sales of $48.1 million primarily due to an increase in managed services. The increase in products sales was due to a shift in mix of higher hardware and third-party software licenses sales which we recognize on a gross basis, and a lower proportion of sales of maintenance, software assurance, subscriptions/SaaS licenses, and services where we recognize revenue on a net basis. We saw increases in net sales from telecom, media and entertainment, SLED, financial services, and all the other categories of customers, which was partially offset by decreases in net sales from our technology customers, and a small decrease from health care customers, during the three months ended September 30, 2020, compared to the prior year.

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For the six months ended September 30, 2020, net sales decreased 0.6%, or $4.8 million, to $788.1 million, compared to $792.9 million in the same period in the prior fiscal year. Product sales for the six months ended September 30, 2020, decreased 1.2%, or $8.2 million, to $690.9 million compared to $699.1 million in the same period in the prior year. Services sales during the six months ended September 30, 2020, increased 3.6%, or $3.4 million, to $97.2 million compared to prior year services sales of $93.8 million. The decrease in net sales was due to reductions in demand from the our customers in the technology and health care markets, which were mostly offset by increases in demand from our customers in the telecom, media and entertainment, SLED, financial services, and all other category of customers, during the six months ended September 30, 2020, compared to the prior year.

Adjusted gross billings increased 3.8%, or $22.0 million, to $601.1 million for the three months ended September 30, 2020, from $579.1 million for the same period in the prior fiscal year. There was an increase in adjusted gross billings from our customers in the telecom, media and entertainment, SLED, and health care customers which was partially offset by decreases in demand from the technology, financial services, and all the other categories of customers. For the six months ended September 30, 2020, adjusted gross billings increased 1.8%, or $20.1 million, to $1,147.5 million, from $1,127.4 million for the same period in the prior fiscal year. The increase in adjusted gross billings is due to higher demand from the same customer end markets that were previously identified for the increase in net sales with the exception of health care customers which declined for the six-month period.

Consolidated gross profit for the three months ended September 30, 2020, decreased $4.1 million, or 3.9%, to $99.0 million, compared with $103.0 million in the same period in the prior year. Consolidated gross margins were 22.9% for the three months ended September 30, 2020, which is a decrease of 210 basis points compared to 25.0% for the same period in the prior fiscal year. The decrease in margins for the three-month period was due to a shift in product mix, as we sold a higher proportion hardware and third-party licenses which are recognized on a gross basis and therefore have lower product margins, and a lower proportion of our product mix was from third-party maintenance, software assurance and subscription/SaaS licenses, and services, which are recorded on a net basis, and were partially offset by slightly higher gross profit from of our financing segment. For the six months ended September 30, 2020, consolidated gross profit increased $1.8 million, or 0.9%, to $197.5 million, compared with $195.7 million for the same period in the prior fiscal year. Consolidated gross margins were 25.1% for the six months ended September 30, 2020, an increase of 40 basis points compared to 24.7% for the same period in the prior fiscal year. The increase in gross margin for the six-month period was due to a shift in product mix, as we sold a higher proportion of third-party maintenance, software assurance and subscription/SaaS licenses, and services. Also contributing to the gross margin improvement was higher service revenues, and higher post-contract revenue from of our financing segment.

Our operating expenses for the three months ended September 30, 2020, decreased 5.6% to $70.5 million, as compared to $74.7 million for the prior year period. The majority of this decrease reflects reductions in selling, general, and administrative expense of 5.2% or $3.6 million, to $66.9 million as compared to $70.5 million in the same period in the prior year, due in part to reductions in travel and entertainment, general office related expenses, employee salaries and benefits, which were partially offset by an increase in allowance for credit losses. Our prior year results benefit from having only incurred a partial quarter of salaries and benefits from employees acquired from ABS Technology. As of September 30, 2020, we had 1,497 employees, a decrease of 132 from 1,629 last year.

For the six months ended September 30, 2020, operating expenses decreased $0.5 million, or 0.3%, to $144.0 million, as compared to $144.5 million in the same period in the prior year. The decrease in operating expenses for the six months ended September 30, 2020, is due to the reductions in interest and financing costs, and depreciation and amortization expense. Selling, general, and administrative expense for the six months ended September 30, 2020, increased slightly to $136.4 million, with increases in salaries and benefits, variable compensation, and reserve for credit losses, offset almost entirely by reductions in general and administrative expense and acquisition related expenses.

Depreciation and amortization expense decreased $0.2 million for both the three and six months ended September 30, 2020. Interest and financing costs decreased $0.3 million and $0.4 million, for the three and six months ended September 30, 2020, respectively, due to a decrease in the average balance of non-recourse notes payable outstanding during the three and six months ended September 30, 2020, as compared to the prior year.

As a result, operating income for the three months ended September 30, 2020, increased $0.1 million, or 0.4%, to $28.5 million as compared to $28.4 million for the same period in the prior year. For the six months ended September 30, 2020, operating income increased $2.3 million, or 4.6%, to $53.5 million, as compared to $51.1 million for the same period in the prior year.

Our effective tax rate for the three and six months ended September 30, 2020, was 30.8%, compared with 29.1% and 28.9%, respectively, for the same periods in the prior year. The change in our effective tax rate was due to an adjustment to the federal benefit from state taxes.

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Consolidated net earnings for the three months ended September 30, 2020, were $19.8 million, a decrease of 1.3%, or $0.3 million, over the prior year’s results, due to the decrease in gross profit, partially offset by a reduction in operating expenses. For the six months ended September 30, 2020, the consolidated net earnings were $37.2 million, an increase of 2.5%, or $0.9 million, compared to the prior year’s results, due to the increase in revenues and gross profit, and other income mostly offset by an increase the provision for income taxes.

Adjusted EBITDA decreased $1.8 million, or 5.2%, to $33.6 million and adjusted EBITDA margin decreased 90 basis points to 7.7% for the three months ended September 30, 2020, as compared to the prior year period of 8.6%. For the six months ended September 30, 2020, adjusted EBITDA increased $0.3 million, or 0.5%, to $64.3 million and the adjusted EBITDA margin increased 10 basis points to 8.2% as compared to the prior year period of 8.1% for the six months ended September 30, 2020, compared to the prior year period.

Diluted earnings per share decreased 2.0%, or $0.03, to $1.48 per share for the three months ended September 30, 2020, as compared to $1.51 per share for the three months ended September 30, 2019. Non-GAAP diluted earnings per share decreased 7.2%, or $0.13, to $1.68 for the three months ended September 30, 2020, as compared to $1.81 for the three months ended September 30, 2019. For the six months ended September 30, 2020, diluted earnings per share increased 2.6%, or $0.07, to $2.78 per share, as compared to $2.71 per share compared to the prior year period. Non-GAAP diluted earnings per share decreased 2.1%, or $0.07, to $3.19 for the six months ended September 30, 2020, as compared to $3.26 for the six months ended September 30, 2019.

Cash and cash equivalents increased $74.9 million or 86.8% to $161.1 million at September 30, 2020, as compared to $86.2 million as of March 31, 2020. The increase is primarily the result of the extension of payment terms by 30 days from certain vendor partners that deferred $76.3 million in payments and a payroll tax deferral under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that deferred $4.8 million in payments that will be paid in December 2021 and December 2022. Our cash on hand, funds generated from operations, amounts available under our credit facility, and the possible monetization of our investment portfolio have provided sufficient liquidity for our business.

The extent of the impact of COVID-19 is uncertain and may impact our liquidity position over the longer term. As credit markets have tightened as a result of COVID-19, we may have difficulty funding our financing transactions with lenders, which may result in the use of our cash or a decrease in financing originations.

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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 IT products.

Our technology segment derives revenue from the sales of new equipment and service engagements. Included in net sales are revenues derived from performing advanced IT professional and managed services that may be sold together with and integral to third-party products and software. 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.

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.

We endeavor to minimize our cost of sales through incentive programs provided by vendors and distributors. The programs for which we qualify 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; 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, as well as internationally in the UK, Canada, Iceland, and Spain. 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 Operating Results

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, decision to sell financial assets, 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 other post-term events.

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We expect to continue to expand by opening new sales locations and hiring additional staff for specific targeted market areas whenever we can find both experienced personnel and desirable geographic areas over the longer term, which may reduce our results from operations. COVID-19 may negatively affect market demand, which will likely lower our financial results, and may adversely impact our ability to expand. We are uncertain as to the extent and duration of the impact to the IT market demand for our products and services.

CRITICAL ACCOUNTING ESTIMATES

As disclosed in Note 2, “Recent Accounting Pronouncements,” we adopted a new credit loss standard on April 1, 2020. Under this new standard, we estimate an allowance for credit losses related to accounts receivable for future expected credit losses by using relevant information such as historical information, current conditions, and reasonable and supportable forecasts. The allowance is measured on a collective basis when similar risk characteristics exist, and a loss-rate for each group with similar risk characteristics is determined using historical credit loss experience as the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current conditions, as well as changes in forecasted macroeconomic conditions. Our allowance reflects the forecasted credit deterioration due to the COVID-19 pandemic.

Our other 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 2020 Annual Report.

SEGMENT RESULTS OF OPERATIONS

The three and six months ended September 30, 2020, compared to the three and six months ended September 30, 2019

Technology Segment

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

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Net sales
Product	$	369,934	$	349,650	$	663,367	$	672,414
Services		49,425		48,068		97,216		93,839
Total		419,359		397,718		760,583		766,253
Cost of sales
Product		301,006		276,475		525,549		534,529
Services		31,156		29,671		60,996		58,341
Total		332,162		306,146		586,545		592,870
Gross profit		87,197		91,572		174,038		173,383
Selling, general, and administrative		62,586		67,189		128,142		129,856
Depreciation and amortization		3,313		3,529		6,801		6,936
Interest and financing costs		1		-		266		-
Operating expenses		65,900		70,718		135,209		136,792
Operating income	$	21,297	$	20,854	$	38,829	$	36,591
Adjusted gross billings	$	601,064	$	579,084	$	1,147,458	$	1,127,447
Adjusted EBITDA	$	26,275	$	27,789	$	49,436	$	49,208

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Net sales: Net sales for the three months ended September 30, 2020, were $419.4 million compared to $397.7 million in the same period in the prior year, an increase of 5.4% or $21.6 million, due to increases in net sales to customers in the telecom, media and entertainment, SLED, financial services, and all the other customer categories, which was partially offset by a decrease in technology, and healthcare customer categories. Product sales increased 5.8%, or $20.3 million, to $369.9 million due to a shift in mix to sales of hardware and third-party licenses, partially offset by reductions in third-party maintenance, software assurance, subscriptions/SaaS licenses, and services where we recognize revenue on a net basis. Services revenues increased 2.8%, or $1.4 million to $49.4 million to due to an increase in managed services.

For the six months ended September 30, 2020, net sales decreased 0.7%, or $5.7 million to $760.6 million compared to $766.3 million during the same period in the prior year. Product sales for the six months ended September 30, 2020, decreased 1.3%, or $9.0 million to $663.4 million due to a higher proportion of sales from third party services that are recognized on a net basis, partially offset by the increase in services revenues by 3.6%, or $3.4 million, to $97.2 million compared to $93.8 million during the same period in the prior year.

Adjusted gross billings increased 3.8%, or $22.0 million, to $601.1 million for the three months ended September 30, 2020, from $579.1 million for the same period in the prior fiscal year. There was an increase in adjusted gross billings from our customers in the telecom, media and entertainment, SLED, and health care customers which was partially offset by decreases in demand from the technology, financial services, and all the other categories of customers. For the six months ended September 30, 2020, adjusted gross billings increased 1.8%, or $20.1 million, to $1,147.5 million, from $1,127.4 million for the same period in the prior fiscal year. The increase in adjusted gross billings is due to higher demand from the same customer end markets that were previously identified for the increase in net sales with the exception of health care customers which declined for the six-month period.

We rely on our vendors to fulfill a large majority of shipments to our customers. As of September 30, 2020, we had open orders of $389.7 million and deferred revenue of $77.1 million. As of September 30, 2019, we had open orders of $210.7 million and deferred revenues of $66.5 million.

We analyze net sales by customer end market and by vendor, as opposed to discrete product and service categories. The percentage of net sales by industry and vendor for the twelve-month periods ended September 30, 2020, and 2019 are summarized below:

	Twelve Months Ended September 30,
	2020			2019			Change
Revenue by customer end market:
Technology		19	%		22	%		(3	%)
Telecom, Media & Entertainment		20	%		16	%		4	%
SLED		16	%		17	%		(1	%)
Healthcare		15	%		15	%		0	%
Financial Services		13	%		14	%		(1	%)
All others		17	%		16	%		1	%
Total		100	%		100	%

	Twelve Months Ended September 30,
	2020			2019			Change
Revenue by vendor:
Cisco Systems		39	%		41	%		(2	%)
NetApp		4	%		3	%		1	%
HP Inc. & HPE		4	%		6	%		(2	%)
Dell/EMC		7	%		4	%		3	%
Juniper Networks		5	%		4	%		1	%
Arista Networks		3	%		5	%		(2	%)
All others		38	%		37	%		1	%
Total		100	%		100	%

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Our revenues by customer end market have remained consistent over the year with over 80% of our revenues generated from customers within the five end markets identified above. During the trailing twelve-month period ended September 30, 2020, we had an increase in the percentage total revenues from customers in the telecom, media and entertainment industry, and all other customer category, and decreases in the percentage of total revenues in the technology, SLED, and financial services markets. These changes were driven by changes caused by the COVID-19 pandemic, changes in customer buying cycles, and the timing of specific IT related initiatives, rather than the acquisition or loss of a customer or set of customers.

The majority of our revenues by vendor are derived from our top six suppliers, which, when combined, is a fairly constant percentage of over 60% of total revenues for the twelve-month periods ended September 30, 2020, and 2019. None of the vendors included within the “other” category exceeded 5% of total revenues.

Cost of sales: For the three months ended September 30, 2020, cost of sales increased 8.5%, or $26.0 million, due to a shift in product mix, as we sold a higher proportion of hardware and third-party software licenses which we recognize on a gross basis. Due to this shift in product mix, our gross margin decreased 220 basis points to 20.8% for the three months ended September 30, 2020, compared to 23.0% in the same period in the prior year. Cost of sales for the six months ended September 30, 2020, decreased 1.1% or $6.3 million which is in-line with the decrease in net sales. For the six months ended September 30, 2020, gross margin increased by 30 basis points to 22.9%, as compared to 22.6% for the prior year period; product margin also increased by 30 basis points to 20.8%, compared to 20.5% in the same period in the prior year. Vendor incentives earned as a percentage of sales decreased 70 basis points and 20 basis points for the three and six months ended September 30, 2020, respectively, resulting in an unfavorable impact on gross margin, as compared to same periods in the prior year.

Selling, general, and administrative: Selling, general, and administrative expenses of $62.6 million for the three months ended September 30, 2020, decreased by $4.6 million, or 6.9% from $67.2 million in the same period in the prior year. Salaries and benefits decreased $0.8 million, or 1.5% to $53.8 million, compared to $54.6 million during the same period in the prior year due to a decrease variable compensation and fringe benefits, more than offsetting an increase in salaries. Our prior year results benefit from having only incurred a partial quarter of salaries and benefits from employees acquired from ABS Technology. Our technology segment had 1,460 employees as of September 30, 2020, a decrease of 135 from 1,595 at September 30, 2019. For the six months ended September 30, 2020, selling, general, and administrative expenses decreased by $1.7 million, or 1.3%, to $128.1 million compared to $129.9 million in the same period in the prior year. Salaries and benefits increased $4.7 million, or 4.5% to $110.8 million, compared to $106.1 million during the same period in the prior year.

General and administrative expenses decreased $4.0 million, or 31.7%, to $8.7 million during the three months ended September 30, 2020, compared to $12.7 million in the same period in the prior year, due to a decrease in travel and entertainment expenses, advertising and marketing, professional fees, and other general office related expenses resulting in part from restrictions on travel due to the COVID-19 pandemic, and $1.1 million in lower acquisition related expenses than the prior year. For the six months ended September 30, 2020, general and administrative expenses decreased $6.8 million, or 28.9%, to $16.8 million. The decrease in selling, general and administrative expenses was primarily due to decrease in travel and entertainment expenses, advertising and marketing, professional fees, and other general office related expenses resulting from travel restrictions due in part to the COVID-19 pandemic, and $1.5 million in lower acquisition related expenses than the prior year.

Depreciation and amortization: Depreciation and amortization decreased $0.2 million, or 6.1%, to $3.3 million during the three months ended September 30, 2020, and decreased $0.1 million, or 1.9%, to $6.8 million for the six months ended September 30, 2020, compared to the prior year periods.

Interest and financing costs: Interest and financing costs were insignificant in the three months ended September 30, 2020, and $0.3 million for the six months ended September 30, 2020, compared to none in the same period in the prior year. This is due to $35.0 million in borrowings under the accounts receivable component of our Technology segment credit facility during the first quarter of the fiscal year.

Segment operating income: As a result of the foregoing, operating income was $21.3 million, an increase of $0.4 million, or 2.1%, for the three months ended September 30, 2020, as compared to $20.9 million in the same period in the prior year. For the six months ended September 30, 2020, operating income was $38.8 million, compared to $36.6 million for the same period in the prior year, an increase of $2.2 million, or 6.1%.

For the three months ended September 30, 2020, adjusted EBITDA was $26.3 million, a decrease of $1.5 million, or 5.4%, compared to $27.8 million in the same period in the prior year. Adjusted EBITDA was $49.4 million, an increase of $0.2 million, or 0.5%, for the six months ended September 30, 2020, compared to $49.2 million for the same period in the prior year.

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Financing Segment

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

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Net sales	$	13,722	$	13,847	$	27,529	$	26,684
Cost of sales		1,957		2,388		4,048		4,397
Gross profit		11,765		11,459		23,481		22,287
Selling, general, and administrative		4,303		3,334		8,214		6,454
Depreciation and amortization		28		28		56		84
Interest and financing costs		246		576		558		1,204
Operating expenses		4,577		3,938		8,828		7,742
Operating income	$	7,188	$	7,521	$	14,653	$	14,545
Adjusted EBITDA	$	7,286	$	7,616	$	14,839	$	14,764

Net sales: Net sales decreased by $0.1 million, or 0.9%, to $13.7 million for the three months ended September 30, 2020, as compared to prior year results due to a reduction in post contract earnings and portfolio earnings, which were mostly offset by higher other financing revenues and transactional gains. During the three months ended September 30, 2020, and 2019, we recognized net gains on sales of financial assets of $4.5 million and $4.1 million, respectively, and the fair value of assets received from these sales were $118.5 million and $95.1 million, respectively.

For the six months ended September 30, 2020, net sales increased to $27.5 million, an increase of $0.8 million, or 3.2% as compared to the same period in the prior year of $26.7 million due to higher other financing revenues and portfolio earnings, which were partially offset by lower post-contract earnings and transactional gains. During the six months ended September 30, 2020, and 2019, we recognized net gains on sales of financial assets of $7.0 million and $7.5 million, respectively, and the fair value of assets received from these sales were $191.7 million and $172.0 million, respectively. At September 30, 2020, we had $180.7 million in financing receivables and operating leases, compared to $188.2 million as of September 30, 2019, a decrease of $7.5 million, or 4.0%.

Cost of sales: Cost of sales decreased $0.4 million and $0.3 million for the three and six months ended September 30, 2020, respectively, which consists of depreciation expense from operating leases. Gross profit increased by 2.7% to $11.8 million, for the three months ended September 30, 2020, and increased by 5.4% to $23.5 million, for the six months ended September 30, 2020, as compared to the prior year periods.

Selling, general and administrative: For the three and six months ended September 30, 2020, selling, general, and administrative expenses increased by $1.0 million or 29.1%, and $1.8 million, or 27.3%, respectively, which was due primarily to an increase in allowance for credit losses of $0.8 million and $1.1 million for the three and six months ended September 30, 2020, as compared to the same periods in the prior year. Variable compensation also increased due to higher gross profit for both the three and six months ended September 30, 2020.

Interest and financing costs: Interest and financing costs decreased by 57.3% to $0.2 million for the three months ended September 30, 2020, and decreased by 53.7% to $0.6 million for the six months ended September 30, 2020, compared to the same periods in the prior year, due to a decrease in the average balance and interest rate on total notes payable outstanding. Total notes payable for the financing segment was $40.3 million as of September 30, 2020, a decrease of $45.7 million, or 53.1%, as compared to $86.0 million as of September 30, 2019. Our weighted average interest rate for non-recourse notes payable was 3.15% and 3.98%, as of September 30, 2020, and 2019, respectively.

Segment operating income: As a result of the foregoing, operating income and adjusted EBITDA both decreased $0.3 million or 4.4% and 4.3%, to $7.2 million and $7.3 million, respectively, for the three months ended September 30, 2020, over the prior year period. For the six months ended September 30, 2020, operating income and adjusted EBITDA both increased $0.1 million, respectively, or 0.7% and 0.5%, to $14.7 million and $14.8 million, respectively.

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Consolidated

Other income: Other income increased to $0.2 million and $0.3 million due to the favorable foreign exchange rate during the three and six months ended September 30, 2020, respectively, compared to an expense of $40 thousand and $85 thousand due to the unfavorable foreign exchange rate in the three and six month periods in the prior year, respectively.

Income taxes: Our provision for income tax expense was $8.8 million and $16.6 million for the three and six months ended September 30, 2020, as compared to $8.2 million and $14.8 million for the same periods in the prior year. Our effective income tax rates for both the three and six months ended September 30, 2020, was 30.8%, compared to 29.1% and 28.9% for the three and six months ended September 30, 2019. The change in our effective tax rate was due to an adjustment to the federal benefit from state taxes.

Net earnings: The foregoing resulted in net earnings of $19.8 million for the three months ended September 30, 2020, a decrease of $0.3 million, or 1.3%, as compared to $20.1 million of the same period in the prior year. For the six months ended September 30, 2020, net earnings were $37.2 million, an increase of $0.9 million, or 2.5%, as compared to $36.3 million in the same period in the prior year.

Basic and fully diluted earnings per common share was $1.48 for the three months ended September 30, 2020, a decrease of 2.0% as compared to $1.51 for both the basic and fully diluted earnings per common share for the same period in the prior year. For the six months ended September 30, 2020, basic and fully diluted earnings per common share were $2.79 and $2.78, an increase for both of 0.3%, as compared to $2.72 and $2.71, respectively, for the same period in the prior year.

Non-GAAP diluted earnings per share decreased 7.2% to $1.68 for the three months ended September 30, 2020, as compared to $1.81 for the three months ended September 30, 2019. Non-GAAP diluted earnings per share decreased 2.1% to $3.19 for the six months ended September 30, 2020, as compared to $3.26 for the six months ended September 30, 2019.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for the three months ending September 30, 2020 was $13.4 million and for the six months ended September 30, 2020 was $13.3 million and $13.4 million respectively. Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share for both the three and six months ended September 30, 2019, was 13.3 million and 13.4 million.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Overview

Our primary source of funding is cash from operations and borrowings which are accounted for as non-recourse and recourse notes payable. We use those funds to meet our capital requirements, which have historically consisted primarily of working capital for operational needs, capital expenditures, purchases of equipment for lease, payments of principal and interest on indebtedness outstanding, acquisitions and the repurchase of shares of our common stock.

ePlus Technology, inc. and certain of its subsidiaries, which are part of our technology segment, finance their operations with funds generated from operations, and with a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). This facility provides short-term capital for our technology segment. There are two components of the WFCDF credit facility: (1) a floor plan component, and (2) an accounts receivable component.

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

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

The extent of the impact of COVID-19 is uncertain and may impact our liquidity position over the longer term. As credit markets have tightened as a result of COVID-19, we may have difficulty funding our financing transactions with lenders, which may result in the use of our cash or a decrease in financing originations.

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Cash Flows

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

	Six Months Ended September 30,
	2020			2019
Net cash provided by (used in) operating activities	$	8,408		$	(54,404	)
Net cash used in investing activities		(2,811	)		(18,050	)
Net cash provided by financing activities		69,730			48,356
Effect of exchange rate changes on cash		(477	)		114
Net increase (decrease) in cash and cash equivalents	$	74,850		$	(23,984	)

Cash flows from operating activities. We had $8.4 million provided by operating activities during the six months ended September 30, 2020, compared to $54.4 million used in operating activities for the six months ended September 30, 2019. See below for a breakdown of operating cash flows by segment (in thousands):

	Six Months Ended September 30,
	2020			2019
Technology segment	$	44,367		$	3,833
Financing segment		(35,959	)		(58,237	)
Net cash provided by (used in) operating activities	$	8,408		$	(54,404	)

Technology Segment: In the six months ended September 30, 2020, our technology segment provided $44.4 million from operating activities primarily due to cash generated from earnings. Additionally, we had net borrowing on the floor plan component of our credit facility of $91.6 million which was partially offset by repayment of $35.0 million in borrowings under the accounts receivable component of our Technology segment credit facility. The net borrowing is primarily the result of extended payment terms from certain vendor partners that deferred $76.3 million in payments for an additional 30 days. The majority of these programs relate to COVID-19 and ended in October 2020. We use this facility to manage working capital needs. We present changes in this balance as financing activity in our consolidated statement of cash flows.

In the six months ended September 30, 2019, operating cash flows provided by our technology segment was $3.8 million as cash generated from earnings exceeding changes in working capital. In addition, cash provided by the accounts payable – floor plan facility was $13.6 million. Accounts payable – floor plan is a facility used to manage working capital needs and we are required to present changes in this balance as financing activity in our consolidated statement of cash flows.

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,
	2020			2019
(DSO) Days sales outstanding (1)		61			59
(DIO) Days inventory outstanding (2)		14			10
(DPO) Days payable outstanding (3)		(54	)		(46	)
Cash conversion cycle		21			23

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

(2) Represents the rolling three-month average of the balance of inventory, net for our technology segment at the end of the period divided by cost of adjusted gross billings for the same three-month period.

(3) Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our technology segment at the end of the period divided by cost of adjusted gross billings for the same three-month period.

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Our cash conversion cycle decreased to 21 days at September 30, 2020, compared to 23 days at September 30, 2019. Our standard payment term for customers is between 30-60 days; however, certain customer orders may be approved for extended payment terms. Our DPO increased 8 days. Invoices processed through our credit facility, or the A/P-floor plan balance, are typically paid within 45-60 days from the invoice date, while A/P trade invoices are typically paid within 30 days from the invoice date; however, certain of our suppliers temporarily increased our terms to 90 days. Our DSO increased 2 days due to an increase in sales during the quarter ended September 30, 2020, to customers with terms greater than or equal to net 60 days. The 4 day increase in DIO was due to an increase in average inventory balances of 45.1%, or $24.0 million, due to pending projects for our customers and some delays in receiving by our customers whose offices were temporarily closed due to COVID-19.

Financing Segment: In the six months ended September 30, 2020, our financing segment used $36.0 million from operating activities, primarily due to changes in financing receivables- net of $54.4 million, partially offset by earnings of $10.4 million and an increase in accounts payable trade of $13.0 million. In the six months ended September 30, 2019, our financing segment used $58.2 million from operating activities, primarily due to changes in financing receivables- net of $76.4 million. We recognize the change in financing receivables, including the issuance of financing receivables offset by repayments of financing receivables and the proceeds from the transfer of financing receivables, when we account for the transfer as a sale, as part of operating activities.

Cash flows related to investing activities. In the six months ended September 30, 2020, we used $2.8 million from investing activities, consisting of $3.3 million for purchases of property, equipment and operating lease equipment offset by $0.5 million of proceeds from the sale of property, equipment, and operating lease equipment. In the six months ended September 30, 2019, we used $18.1 million from investing activities, consisting of $13.8 million for acquisitions, $4.9 million for purchases of property, equipment and operating lease equipment offset by $0.7 million of proceeds from the sale of property, equipment, and operating lease equipment.

Cash flows from financing activities. In the six months ended September 30, 2020, cash provided by financing activities was $69.7 million consisting of net borrowings on floor plan facility of $91.6 million, net borrowings of non-recourse and recourse notes payable of $18.1 million, which was partially offset by repayment of $35.0 million in borrowings under the accounts receivable component of our Technology segment credit facility and $4.5 million in repurchase of common stock.

In the six months ended September 30, 2019, cash provided by financing activities was $48.4 million, consisting of net borrowings of non-recourse and recourse notes payable of $49.2 million, net borrowings on floor plan facility of $13.6 million, and offset by $13.7 million in repurchase of common stock and $0.8 million paid to sellers of SLAIT as part of a working capital adjustment.

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

Non-Cash Activities. We transfer contractual payments due to us under lease and financing agreements to third-party financial institutions. As a condition of these agreements, 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, the customer will make payments to us, and we will remit the payment to the financial institution. The economic impact to us under either structure is similar, in that the assigned contractual payments are paid by the customer and remitted to the lender. However, when our customer makes payments through a trust, such payments represent non-cash transactions. Also, in certain assignment agreements, we may direct the third-party financial institution to pay some of the proceeds from the assignment directly to the vendor or vendors that have supplied the assets being leased and or financed. In these situations, the portion of the proceeds paid directly to our vendors are non-cash transactions.

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Secured borrowings – Financing segment

We may finance all or most of the cost of the assets that we finance for customers by transferring all or part of the contractual payments due to us to third-party financing institutions. When we account for the transfer as a secured borrowing, we recognize the proceeds as either recourse or non-recourse notes payable. Our customers are responsible for repaying the debt from a secured borrowing. The lender typically secures a lien on the financed assets at the time the financial assets are transferred and releases it upon collecting all the transferred payments. We are not liable for the repayment of non-recourse loans unless we breach our representations and warranties in the loan agreements. The lender assumes the credit risk and their only recourse, upon default by the customer, is against the customer and the specific equipment under lease. While we expect that the credit quality of our financing arrangements and our residual return history will continue to allow us to obtain such financing, such financing may not be available on acceptable terms, or at all. As a result of COVID-19, credit markets have tightened. Our lenders are more discerning and are taking longer to approve transactions. In addition, certain lenders have narrowed their demand to certain types of transactions and/or credit quality and excluding others. For example, some lenders have declined transactions that have longer terms or transactions with certain market segments. Therefore, we may no longer be able to transfer certain receivables to financial institutions which may result in investing our capital or declining the transaction.

Credit facility — Technology segment

Our subsidiary, ePlus Technology, inc., and certain of its subsidiaries have a financing facility from WFCDF to finance their 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.

On May 15, 2020, we executed an amendment to the WFCDF credit facility that increased the aggregate limit of the two components, except during a temporary uplift, to $275.0 million. Additionally, we have an election to temporarily increase the aggregate limit to $350.0 million for a period of not less than 30 days, provided that all such periods shall not exceed 150 days in the aggregate in any calendar year. Further, the amendment increased the limit on the accounts receivable component of the WFCDF credit facility to $100.0 million, changed the interest rate to two percent (2.00%) plus the greater of one month LIBOR or seventy-five hundredths of one percent (0.75%), and modified certain restrictions on ePlus Technology, inc.’s ability to pay dividends to ePlus inc.

As of September 30, 2020, the limit of the two components of the credit facility was $275 million, and the accounts receivable component had a sub-limit of $100 million.

The WFCDF credit facility is secured by the assets of ePlus Technology, inc. and certain of its subsidiaries, and varies available borrowing based upon the value of their receivables and inventory. Additionally, the credit facility requires a guaranty of $10.5 million by ePlus inc.

The credit facility restricts the ability of ePlus Technology, inc. and certain of its subsidiaries to pay dividends to ePlus inc. unless their available borrowing meets certain thresholds. As of September 30, 2020, their available borrowing met the threshold such that there were no restricted net assets of ePlus Technology, inc.

The credit facility requires that financial statements of ePlus Technology, inc. and certain of its subsidiaries be provided within 45 days of each quarter and 90 days of each fiscal year end and requires that other operational reports be provided on a regular basis. Either party may terminate with 90 days’ advance notice.

The loss of the WFCDF credit facility, including during circumstances related to COVID-19, 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. After a customer places a purchase order with us and after we have completed our credit review of the customer, 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 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. In addition, certain suppliers have temporarily extended their repayment terms to us due to COVID-19. Most customer payments in our technology segment are remitted to our lockboxes. Once payments are cleared, the monies in the lockbox accounts are automatically and daily transferred to our operating account. On the due dates of the floor plan component, we make cash payments to WFCDF. Our borrowings and repayments under the floor plan component are included in “net borrowings (repayments) on floor plan facility” within cash flows from the financing activities in our consolidated statements of cash flows.

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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, 2020	Balance as of September 30, 2020	Maximum Credit Limit at March 31, 2020	Balance as of March 31, 2020
$275,000	$218,970	$300,000	$127,416

On October 1, 2020, we elected to exercise the temporary increase in the aggregate limit of the WFCDF credit facility to $350.0 million for a period of not less than 30 days.

Accounts Receivable Component. ePlus Technology, inc. and certain of its subsidiaries have an accounts receivable component included within the WFCDF credit facility, which has a revolving line of credit. The outstanding balance under the accounts receivable component is recorded as recourse notes payable on our consolidated balance sheets. Our borrowings and repayments under the accounts receivable component are included in “borrowings of non-recourse and recourse notes payable” and “repayments of non-recourse and recourse notes payable”, respectively, within cash flows from the financing activities in our consolidated statements of cash flows.

As of March 31, 2020, there was an outstanding balance for the accounts receivable component of $35.0 million. As of September 30, 2020, there was no outstanding balance for the accounts receivable component. As of September 30, 2020, and March 31, 2020, the maximum credit limit was $100.0 million and $50.0 million, respectively. We may maintain a balance on the accounts receivable component to assist in mitigating risk arising from COVID-19.

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 material 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, 2020, we were not involved in any unconsolidated special purpose entity transactions.

Adequacy of Capital Resources

The continued implementation of our business strategy will require a significant investment in both resources and managerial focus. In addition, we may selectively acquire other companies that have attractive customer relationships and skilled sales and/or engineering forces. We may also open 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. These actions may result in increased working capital needs as the business expands. As a result, we may require additional financing to fund our strategy, implementation, potential future acquisitions, and working capital needs, which may include additional debt and equity financing. The impacts of COVID-19 may limit or eliminate our access to capital. While the future is uncertain, we do not believe our credit facility will be terminated by the lender or us. Our lending partners in our financing segment have tightened credit availability and are more discerning in their approval process. However, currently we have funding resources available for our transactions.

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.

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Potential Fluctuations in Quarterly Operating Results

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

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to the worldwide impacts from COVID-19, currency fluctuations, 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 to a lessee or third-party at the expiration of a lease term or prior to such expiration, and the transfer of financial assets. Sales of equipment and transfers of financial assets may have the effect of increasing revenues and net income during the quarter in which the sale occurs and reducing revenues and net income otherwise expected in subsequent quarters. See Part I, Item 1A, “Risk Factors,” in our 2020 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our cash flow may be adversely affected by the risks related to the COVID-19 pandemic, which may result in delays in the collections of our accounts receivables or non-payment.

Although a substantial portion of our liabilities are non-recourse, fixed-interest-rate instruments, we utilize lines of credit and other financing facilities that are subject to fluctuations in short-term interest rates. Our non-recourse instruments, which are denominated in US dollars, were entered for other than trading purposes and bear interest at a fixed rate. Because the interest rate on these instruments is fixed, changes in interest rates will not directly impact our cash flows. Financing transactions funded with our cash flows, not debt, and may be subject to interest rate risk. If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds. Borrowings under the WFCDF facility bear interest at a market-based variable rate. As of September 30, 2020, the aggregate fair value of our recourse and non-recourse borrowings approximated their carrying value.

We have transactions in foreign currencies, primarily in British Pounds, Euros, and Indian Rupees. There is a potential for exposure to fluctuations in foreign currency rates resulting primarily from the translation exposure associated with the preparation of our consolidated financial statements. In addition, we have foreign currency exposure when transactions are not denominated in our subsidiary’s functional currency. To date, our foreign operations are insignificant in relation to total consolidated operations, and we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position.

The UK referendum (“Brexit”) to leave the European Union could impact revenue items, cost items, tax, goodwill impairments and liquidity, among others. The most obvious immediate impact is the effect of foreign exchange fluctuations on revenue and cost items. We have determined that our foreign currency exposure for our UK operations is insignificant in relation to total consolidated operations, and we believe those potential fluctuations in currency exchange rates and other Brexit-related economic and operational risks will not have a material effect on our results of operations and financial position.

We evaluate Brexit-related developments on a regular basis to determine if such developments are anticipated to have a material impact on the Company’s results on operations and financial position.

We lease assets in foreign countries, including Canada, the UK and several other European countries. As a lessor, we lease assets for amounts denominated in British Pounds, Euros, and Canadian dollars. As our foreign operations have been smaller compared to our domestic operations, we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position.

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Item 4.  Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” as defined in the Exchange Act Rule 13a-15(e). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2020.

Changes in Internal Control Over Financial Reporting.

There have not been any changes in our internal control over financial reporting during the quarter ended September 30, 2020, that 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, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system cannot provide absolute assurance due to its inherent limitations; it is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. A control system also can be circumvented by collusion or improper management override. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud. However, these inherent limitations are known features of the financial reporting process; therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operation. However, from time to time, we may be subject to legal proceedings that arise in the ordinary course of business. Legal proceedings which may arise in the ordinary course of business include, but are not limited to, preference payment claims asserted in customer bankruptcy proceedings; tax audits; 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; claims relating to alleged security or privacy breaches, and claims stemming from actions or events relating to COVID-19. We attempt to ameliorate the effect of potential litigation through insurance coverage and contractual protections such as rights to indemnifications and limitations of liability. Additionally, we proactively seek to recover funds to which we may be entitled. From time to time, we are successful in obtaining recoveries by filing a claim in class action suits, however, we have limited insight into the timing or amount of those recoveries.

We provide for costs relating to contingencies when a loss is probable, and the amount is reasonably determinable. In the opinion of management, there was not at least a reasonable possibility that the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies for asserted legal and other claims. However, the outcome of legal proceedings and claims brought against us is subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements for that reporting period could be materially adversely affected.

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Item 1A. Risk Factors

There has not been any material change in the risk factors previously disclosed in Part I, Item 1A of our 2020 Annual Report.

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, 2020.

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, 2020 through April 30, 2020		-	$	-		-		339,324	(2)
May 1, 2020 through May 27, 2020		996	$	66.75		-		339,324	(3)
May 28, 2020 through May 31, 2020		-				-		500,000	(4)
June 1, 2020 through June 30, 2020		36,644	$	71.94		-		500,000	(5)
July 1, 2020 through July 31, 2020		-				-		500,000	(6)
August 1, 2020 through August 31, 2020		-	$	-		-		500,000	(7)
September 1, 2020 through September 30, 2020		24,318	$	73.37		24,318		475,682	(8)

(1) Any shares acquired were in open-market purchases, except for 37,640 shares, out of which 996 were repurchased in May 2020 and 36,644 in June 2020 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, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of April 30, 2020, the remaining authorized shares to be purchased were 339,324.

(3) As of May 27, 2019, the authorization under the then existing share repurchase plan expired.

(4) On May 20, 2020, the board of directors authorized the company to repurchase up to 500,000 shares of our outstanding common stock commencing on May 28, 2020, and continuing to May 27, 2021. As of May 31, 2020, the remaining authorized shares to be purchased were 500,000.

(5) The share purchase authorization in place for the month ended June 30, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of June 30, 2020, the remaining authorized shares to be purchased were 500,000.

(6) The share purchase authorization in place for the month ended July 31, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of July 31, 2020, the remaining authorized shares to be purchased were 500,000.

(7) The share purchase authorization in place for the month ended August 31, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of August 31, 2020, the remaining authorized shares to be purchased were 500,000.

(8) The share purchase authorization in place for the month ended September 30, 2020, had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2020, the remaining authorized shares to be purchased were 475,682.

The timing and expiration date of the current stock repurchase authorizations are included in Note 12, “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

Exhibit Number	Exhibit Description
3.1	ePlus inc. Amended and Restated Certificate of Incorporation as amended September 15, 2008 (Incorporated herein by reference as Exhibit 3.1 to our Current Report on Form 8-K filed on September 19, 2008).
3.2	Amended and Restated Bylaws of ePlus inc., as amended February 15, 2018 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on February 20, 2018).
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
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in  Exhibit 101).

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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, 2020	/s/ MARK P. MARRON
	By: Mark P. Marron,
	Chief Executive Officer and President
	(Principal Executive Officer)
Date:  November 4, 2020	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Mark P. Marron, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:  November 4, 2020

/s/ MARK P. MARRON

Mark P. Marron

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elaine D. Marion, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:  November 4, 2020

/s/ ELAINE D. MARION

Elaine D. Marion

Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 USC. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ePlus inc. on Form 10-Q for the six months ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to 18 USC. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned's best knowledge and belief:

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

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

Date:  November 4, 2020

/s/ MARK P. MARRON

Mark P. Marron, Chief Executive Officer

and President

(Principal Executive Officer)

/s/ ELAINE D. MARION

Elaine D. Marion, Chief Financial Officer

(Principal Financial Officer)

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

XML

Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2020	Nov. 02, 2020
Cover [Abstract]
Entity Registrant Name	ePlus inc.
Entity Central Index Key	0001022408
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		13,507,214
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	1-34167
Entity Tax Identification Number	54-1817218
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	13595 Dulles Technology Drive
Entity Address, City or Town	Herndon
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20171-3413
City Area Code	703
Local Phone Number	984-8400
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	PLUS
Security Exchange Name	NASDAQ

XML

UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 161,081	$ 86,231
Accounts receivable-trade, net	369,037	374,998
Accounts receivable-other, net	40,832	36,570
Inventories	73,751	50,268
Financing receivables-net, current	92,766	70,169
Deferred costs	22,329	22,306
Other current assets	8,233	9,256
Total current assets	768,029	649,798
Financing receivables and operating leases-net	87,926	74,158
Property, equipment and other assets	34,314	32,596
Goodwill	118,177	118,097
Other intangible assets-net	30,265	34,464
TOTAL ASSETS	1,038,711	909,113
Current liabilities:
Accounts payable	104,893	82,919
Accounts payable-floor plan	218,970	127,416
Salaries and commissions payable	30,284	30,952
Deferred revenue	59,078	55,480
Recourse notes payable-current	2,286	37,256
Non-recourse notes payable-current	35,610	29,630
us-gaap_OtherLiabilitiesCurrent	25,372	22,986
Total current liabilities	476,493	386,639
Non-recourse notes payable-long term	2,444	5,872
Deferred tax liability-net	3,762	2,730
us-gaap_OtherLiabilitiesNoncurrent	32,942	27,727
TOTAL LIABILITIES	515,641	422,968
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding	0	0
Common stock, $0.01 per share par value; 25,000 shares authorized; 13,537 outstanding at September 30, 2020 and 13,500 outstanding at March 31, 2020	145	144
Additional paid-in capital	148,845	145,197
Treasury stock, at cost, 958 shares at September 30, 2020 and 896 shares at March 31, 2020	(72,911)	(68,424)
Retained earnings	447,425	410,219
Accumulated other comprehensive income-foreign currency translation adjustment	(434)	(991)
Total Stockholders' Equity	523,070	486,145
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,038,711	$ 909,113

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UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2020	Mar. 31, 2020
STOCKHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000	2,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	25,000	25,000
Common stock, shares outstanding (in shares)	13,537	13,500
Treasury stock, shares (in shares)	958	896

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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Net sales
Total	$ 433,081	$ 411,565	$ 788,112	$ 792,937
Cost of sales
Total	334,119	308,534	590,593	597,267
Gross profit	98,962	103,031	197,519	195,670
Selling, general, and administrative	66,889	70,523	136,356	136,310
Depreciation and amortization	3,341	3,557	6,857	7,020
Interest and financing costs	247	576	824	1,204
Operating expenses	70,477	74,656	144,037	144,534
Operating income	28,485	28,375	53,482	51,136
Other income (expense)	184	(40)	282	(85)
Earnings before tax	28,669	28,335	53,764	51,051
Provision for income taxes	8,823	8,237	16,558	14,765
Net earnings	$ 19,846	$ 20,098	$ 37,206	$ 36,286
Net earnings per common share-basic (in dollars per share)	$ 1.48	$ 1.51	$ 2.79	$ 2.72
Net earnings per common share-diluted (in dollars per share)	$ 1.48	$ 1.51	$ 2.78	$ 2.71
Weighted average common shares outstanding-basic (in shares)	13,372	13,312	13,347	13,334
Weighted average common shares outstanding-diluted (in shares)	13,391	13,350	13,394	13,408
Product [Member]
Net sales
Total	$ 383,656	$ 363,497	$ 690,896	$ 699,098
Cost of sales
Total	302,963	278,863	529,597	538,926
Services [Member]
Net sales
Total	49,425	48,068	97,216	93,839
Cost of sales
Total	$ 31,156	$ 29,671	$ 60,996	$ 58,341

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UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 19,846	$ 20,098	$ 37,206	$ 36,286
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	520	(350)	557	(613)
Other comprehensive income (loss)	520	(350)	557	(613)
TOTAL COMPREHENSIVE INCOME	$ 20,366	$ 19,748	$ 37,763	$ 35,673

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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net earnings	$ 37,206	$ 36,286
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	9,460	10,077
Reserve for credit losses	1,766	631
Share-based compensation expense	3,648	4,054
Deferred taxes	1,032	(3)
Payments from lessees directly to lenders-operating leases	(13)	(34)
Gain on disposal of property, equipment, and operating lease equipment	(278)	(436)
Changes in:
Accounts receivable	1,755	(46,100)
Inventories-net	(23,381)	(5,301)
Financing receivables-net	(54,386)	(76,423)
Deferred costs and other assets	(1,052)	(18,826)
Accounts payable-trade	21,717	15,585
Salaries and commissions payable, deferred revenue, and other liabilities	10,934	26,086
Net cash provided by (used in) operating activities	8,408	(54,404)
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment	456	653
Purchases of property, equipment and operating lease equipment	(3,267)	(4,888)
Cash used in acquisitions, net of cash acquired	0	(13,815)
Net cash used in investing activities	(2,811)	(18,050)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable	23,613	54,877
Repayments of non-recourse and recourse notes payable	(40,529)	(5,629)
Repurchase of common stock	(4,487)	(13,692)
Repayments of financing of acquisitions	(421)	(785)
Net borrowings on floor plan facility	91,554	13,585
Net cash provided by financing activities	69,730	48,356
Effect of exchange rate changes on cash	(477)	114
Net increase (decrease) in cash and cash equivalents	74,850	(23,984)
Cash and cash equivalents, beginning of period	86,231	79,816
Cash and cash equivalents, end of period	161,081	55,832
Supplemental disclosures of cash flow information:
Cash paid for interest	739	1,115
Cash paid for income taxes	12,348	12,471
Cash paid for amounts included in the measurement of lease liabilities	2,975	2,566
Schedule of non-cash investing and financing activities:
Purchases of property, equipment, and operating lease equipment	(393)	(396)
Financing of acquisitions	0	(1,464)
Borrowing of non-recourse and recourse notes payable	35,780	82,462
Repayments of non-recourse and recourse notes payable	(13)	(34)
Vesting of share-based compensation	7,916	8,972
New operating lease assets obtained in exchange for lease obligations	$ 774	$ 5,225

XML

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Mar. 31, 2019	$ 143	$ 137,243	$ (53,999)	$ 341,137	$ (271)	$ 424,253
Balance (in shares) at Mar. 31, 2019	13,611
Issuance of restricted stock awards	$ 1	0	0	0	0	1
Issuance of restricted stock awards (in shares)	86
Share-based compensation	$ 0	1,919	0	0	0	1,919
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (13,455)	0	0	(13,455)
Repurchase of common stock (in shares)			(188)
Net earnings	0	0	$ 0	16,188	0	16,188
Foreign currency translation adjustment	0	0	0	0	(263)	(263)
Balance at Jun. 30, 2019	$ 144	139,162	(67,454)	357,325	(534)	428,643
Balance (in shares) at Jun. 30, 2019	13,509
Balance at Mar. 31, 2019	$ 143	137,243	(53,999)	341,137	(271)	424,253
Balance (in shares) at Mar. 31, 2019	13,611
Net earnings						36,286
Balance at Sep. 30, 2019	$ 144	141,297	(67,691)	377,423	(884)	450,289
Balance (in shares) at Sep. 30, 2019	13,513
Balance at Jun. 30, 2019	$ 144	139,162	(67,454)	357,325	(534)	428,643
Balance (in shares) at Jun. 30, 2019	13,509
Issuance of restricted stock awards	$ 0	0	0	0	0	0
Issuance of restricted stock awards (in shares)	7
Share-based compensation	$ 0	2,135	0	0	0	2,135
Share-based compensation (in shares)	(3)
Repurchase of common stock	$ 0	0	$ (237)	0	0	(237)
Repurchase of common stock (in shares)			0
Net earnings	0	0	$ 0	20,098	0	20,098
Foreign currency translation adjustment	0	0	0	0	(350)	(350)
Balance at Sep. 30, 2019	$ 144	141,297	(67,691)	377,423	(884)	450,289
Balance (in shares) at Sep. 30, 2019	13,513
Balance at Mar. 31, 2020	$ 144	145,197	(68,424)	410,219	(991)	$ 486,145
Balance (in shares) at Mar. 31, 2020	13,500					13,500
Issuance of restricted stock awards	$ 1	0	0	0	0	$ 1
Issuance of restricted stock awards (in shares)	91
Share-based compensation	$ 0	1,885	0	0	0	1,885
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (2,703)	0	0	(2,703)
Repurchase of common stock (in shares)			(38)
Net earnings	0	0	$ 0	17,360	0	17,360
Foreign currency translation adjustment	0	0	0	0	37	37
Balance at Jun. 30, 2020	$ 145	147,082	(71,127)	427,579	(954)	502,725
Balance (in shares) at Jun. 30, 2020	13,553
Balance at Mar. 31, 2020	$ 144	145,197	(68,424)	410,219	(991)	$ 486,145
Balance (in shares) at Mar. 31, 2020	13,500					13,500
Net earnings						$ 37,206
Balance at Sep. 30, 2020	$ 145	148,845	(72,911)	447,425	(434)	$ 523,070
Balance (in shares) at Sep. 30, 2020	13,537					13,537
Balance at Jun. 30, 2020	$ 145	147,082	(71,127)	427,579	(954)	$ 502,725
Balance (in shares) at Jun. 30, 2020	13,553
Issuance of restricted stock awards	$ 0	0	0	0	0	0
Issuance of restricted stock awards (in shares)	8
Share-based compensation	$ 0	1,763	0	0	0	1,763
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (1,784)	0	0	(1,784)
Repurchase of common stock (in shares)			(24)
Net earnings	0	0	$ 0	19,846	0	19,846
Foreign currency translation adjustment	0	0	0	0	520	520
Balance at Sep. 30, 2020	$ 145	$ 148,845	$ (72,911)	$ 447,425	$ (434)	$ 523,070
Balance (in shares) at Sep. 30, 2020	13,537					13,537

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Sep. 30, 2020

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional and managed services and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises in North America, the United Kingdom (“UK”), and other European countries.

BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses acquired are included in the unaudited consolidated financial statements from the dates of acquisition.

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the six months ended September 30, 2020, and 2019, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the six months ended September 30, 2020, and 2019 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2021, or any other future period. These unaudited consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2020 (“2020 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.

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

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 41% and 43% of our technology segment’s net sales for the three months ended September 30, 2020, and 2019, respectively, and 40% and 42% of our technology segment’s net sales for the six months ended September 30, 2020, and 2019, respectively.

SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2020, except for changes from the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update ("ASU") 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended (“ASU 2016-13”). The updates to our accounting policies from adopting ASU 2016-13 are provided below.

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We charge off uncollectable financing receivables when we stop pursuing collection.

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RECENT ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Sep. 30, 2020

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

CREDIT LOSSES — We adopted ASU 2016-13 on April 1, 2020. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Our adoption of this update, including the cumulative-effect adjustment to retained earnings, is not significant to our financial statements. Refer to Note 7, “Allowance for Credit Losses” for additional information.

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REVENUES

6 Months Ended

Sep. 30, 2020

REVENUES [Abstract]

REVENUES

3. REVENUES

Contract balances

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $41.3 million and $33.1 million of receivables from contracts with customers included within financing receivables as of September 30, 2020, and March 31, 2020, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

Contract liabilities	September 30, 2020		March 31, 2020
Current (included in deferred revenue)	$	58,267	$	54,486
Non-current (included in other liabilities)	$	18,794	$	16,395

Revenue recognized from the beginning contract liability balance was $11.3 million and $26.9 million for the three and six months ended September 30, 2020, respectively, and $13.6 million and $29.4 million for the three and six months ended September 30, 2019, respectively.

Performance obligations

The following table includes revenue expected to be recognized in the future related to performance obligations, primarily non-cancelable contracts for ePlus managed services, that are unsatisfied or partially unsatisfied at the end of the reporting period, (in thousands).

Remainder of Year ending March 31, 2021	$	20,527
Year Ending March 31, 2022		18,889
Year Ending March 31, 2023		8,385
Year Ending March 31, 2024		2,026
Year Ending March 31, 2025		516
Year Ending March 31, 2026 and thereafter		111
Total remaining performance obligations	$	50,454

The table does not include the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts where we recognize revenue at the amount that we have the right to invoice for services performed.

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FINANCING RECEIVABLES AND OPERATING LEASES

6 Months Ended

Sep. 30, 2020

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

FINANCING RECEIVABLES AND OPERATING LEASES

4. FINANCING RECEIVABLES AND OPERATING LEASES

Our financing receivables and operating leases consist primarily of leases of IT and communication equipment and notes receivable from financing customer purchases of third-party software, maintenance, and services. Our leases often include elections for the lessee to purchase the underlying asset at the end of the lease term. Occasionally, our leases provide the lessee a bargain purchase option.

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three and six months ended September 30, 2020, and 2019 (in thousands):

	Three months ended September 30, 2020		Three months ended September 30, 2019		Six months ended September 30, 2020		Six months ended September 30, 2019
Net sales	$	7,655	$	3,133	$	17,818	$	7,987
Cost of sales		5,402		2,702		10,729		6,652
Gross profit	$	2,253	$	431	$	7,089	$	1,335

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three and six months ended September 30, 2020, and 2019 (in thousands):

	Three months ended September 30 2020		Three months ended September 30, 2019		Six months ended September 30, 2020		Six months ended September 30, 2019
Interest income on sales-type leases	$	1,884	$	1,495	$	4,103	$	3,590
Lease income on operating leases	$	3,900	$	5,059	$	7,738	$	10,418

FINANCING RECEIVABLES—NET

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

September 30, 2020	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	90,002		$	76,700		$	166,702
Unguaranteed residual value (1)		-			20,213			20,213
Initial direct costs, net of amortization		364			-			364
Unearned income		-			(11,329	)		(11,329	)
Reserve for credit losses (2)		(1,337	)		(1,227	)		(2,564	)
Total, net	$	89,029		$	84,357		$	173,386
Reported as:
Current	$	52,397		$	40,369		$	92,766
Long-term		36,632			43,988			80,620
Total, net	$	89,029		$	84,357		$	173,386

(1) Includes unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable.

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

March 31, 2020	Notes Receivable			Lease Receivables			Financing Receivables
Minimum payments	$	55,417		$	69,492		$	124,909
Estimated unguaranteed residual value (1)		-			21,862			21,862
Initial direct costs, net of amortization		212			247			459
Unearned income		-			(11,612	)		(11,612	)
Reserve for credit losses (2)		(798	)		(610	)		(1,408	)
Total, net	$	54,831		$	79,379		$	134,210
Reported as:
Current	$	31,181		$	38,988		$	70,169
Long-term		23,650			40,391			64,041
Total, net	$	54,831		$	79,379		$	134,210

(1) Includes unguaranteed residual values of $14,972 thousand for sales type leases, which have been sold and accounted for as sales.

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

The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of September 30, 2020 (in thousands):

Remainder of the Year ending March 31, 2021	$	46,006
Year Ending March 31, 2022		19,376
Year Ending March 31, 2023		8,196
Year Ending March 31, 2024		2,205
Year Ending March 31, 2025 and thereafter		917
Total	$	76,700

OPERATING LEASES—NET

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

	September 30, 2020			March 31, 2020
Cost of equipment under operating leases	$	19,578		$	21,276
Accumulated depreciation		(12,272	)		(11,159	)
Investment in operating lease equipment—net (1)	$	7,306		$	10,117

(1) Amounts include estimated unguaranteed residual values of $2.5 million and $3.1 million as of September 30, 2020, and March 31, 2020, respectively.

The following table provides the future scheduled minimum lease rental payments for operating leases as of September 30, 2020 (in thousands):

Remainder of the Year ending March 31, 2021	$	1,534
Year Ending March 31, 2022		1,927
Year Ending March 31, 2023		1,436
Year Ending March 31, 2024		477
Year Ending March 31, 2025 and thereafter		35
Total	$	5,409

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for as sales or secured borrowings.

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of September 30, 2020, and March 31, 2020, we had financing receivables of $33.7 million and $34.6 million, respectively, and operating leases of $4.9 million and $6.7 million, respectively, which were collateral for non-recourse notes payable. See Note 9, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. During the three months ended September 30, 2020, and 2019, we recognized net gains of $4.5 million and $4.1 million, respectively, and total proceeds from these sales were $118.5 million and $95.1 million, respectively. For the year to date periods ended September 30, 2020, and 2019, we recognized net gains of $7.0 million and $7.5 million, respectively, and total proceeds from these sales were $191.7 million and $172.0 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the services. As of both September 30, 2020, and March 31, 2020, we had deferred revenue of $0.4 million for servicing obligations.

In a limited number of transfers accounted for as sales, we indemnified the assignee in the event that the lessee elected to early terminate the lease. As of September 30, 2020, our maximum potential future payments related to such guarantees is immaterial. We believe the likelihood of making any such payments to be remote.

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LESSEE ACCOUNTING

6 Months Ended

Sep. 30, 2020

LESSEE ACCOUNTING [Abstract]

LESSEE ACCOUNTING

5. LESSEE ACCOUNTING

We lease office space for periods up to 6 years. We recognize our right-of-use assets as part of property, equipment and other assets. We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities, respectively. We recognized rent expense of $1.5 million as part of selling, general, and administrative expenses for both the three months ended September 30, 2020, and September 30, 2019, and $3.1 million for both the six months ending September 30, 2020, and September 30, 2019.

The following table provides supplemental information about the remaining lease terms and discount rates applied as of September 30, 2020, and March 31, 2020:

Lease term and Discount Rate	September 30, 2020			March 31, 2020
Weighted average remaining lease term (months)		34			38
Weighted average discount rate		3.8	%		3.9	%

The following table provides our future lease payments under our operating leases as of September 30, 2020 (in thousands):

	September 30, 2020
Remainder of the year ending March 31, 2021	$	2,432
Year ending March 31, 2022		4,319
Year ending March 31, 2023		3,093
Year ending March 31, 2024		1,249
Year ending March 31, 2025 and thereafter		813
Total lease payments	$	11,906
Less: interest		(617	)
Present value of lease liabilities	$	11,289

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Sep. 30, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

6. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The carrying value of goodwill was $118.2 and $118.1 million as of September 30, 2020, and March 31, 2020, respectively. There was no significant activity in the balance during the six months ended September 30, 2020, other than change in foreign currency translation of $0.1 million.

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations. Our entire balance as of September 30, 2020, and March 31, 2020, relates to our technology reportable segment, which we also determined to be one reporting unit.

We test goodwill for impairment on an annual basis, as of the first day of our third fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value.

In our annual test as of October 1, 2019, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our technology reporting unit continued to substantially exceed its carrying value.

During the fourth quarter of fiscal year 2020, we determined that the uncertainty associated with the economic environment stemming from the COVID-19 pandemic was a triggering event and we elected to perform a quantitative goodwill impairment test. We concluded that the fair value of our technology reporting unit substantially exceeded its carrying value as of March 31, 2020. Our conclusions would not be impacted by a ten percent change in our estimate of the fair value of the reporting unit.

OTHER INTANGIBLE ASSETS

Our other intangible assets consist of the following on September 30, 2020, and March 31, 2020 (in thousands):

	September 30, 2020							March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships & other intangibles	$	63,093	$	(37,467	)	$	25,626	$	63,006	$	(33,000	)	$	30,006
Capitalized software development		11,176		(6,537	)		4,639		10,385		(5,927	)		4,458
Total	$	74,269	$	(44,004	)	$	30,265	$	73,391	$	(38,927	)	$	34,464

Customer relationships and other intangibles are generally amortized between 5 to 10 years. Capitalized software development is generally amortized over 5 years.

Total amortization expense for other intangible assets was $2.5 million for both the three months ended September 30, 2020, and 2019, respectively, and $5.0 million and $4.9 million for the six months ended September 30, 2020, and 2019, respectively.

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ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Sep. 30, 2020

ALLOWANCE FOR CREDIT LOSSES [Abstract]

ALLOWANCE FOR CREDIT LOSSES

7. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the six months ended September 30, 2020, and 2019 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2020	$	1,781		$	798		$	610		$	3,189
Provision for credit losses		576			566			624			1,766
Write-offs and other		(27	)		(27	)		(7	)		(61	)
Balance September 30, 2020	$	2,330		$	1,337		$	1,227		$	4,894

	Accounts Receivable			Notes Receivable		Lease Receivables			Total
Balance April 1, 2019	$	1,579		$	505	$	530		$	2,614
Provision for credit losses		311			15		(27	)		299
Write-offs and other		(42	)		-		(3	)		(45	)
Balance September 30, 2019	$	1,848		$	520	$	500		$	2,868

The following table provides our allowance for credit losses and minimum payments associated with our notes receivables and lease-related receivables disaggregated based on our impairment method as of March 31, 2020 (in thousands):

	March 31, 2020
	Notes Receivable		Lease Receivables
Allowance for credit losses:
Ending balance: collectively evaluated for impairment	$	736	$	610
Ending balance: individually evaluated for impairment		62		-
Ending balance	$	798	$	610
Minimum payments:
Ending balance: collectively evaluated for impairment	$	55,005	$	69,492
Ending balance: individually evaluated for impairment		412		-
Ending balance	$	55,417	$	69,492

We evaluate our customers using an internally assigned credit quality rating (“CQR”):

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

• Average CQR: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Loss rates in this category are generally in the range of 2% to 10%.

• Low CQR: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. The loss rates in this category in the normal course are generally in the range of 10% to 100%.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of September 30, 2020 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2021		2020		2019		2018		2017		2016 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	64,678	$	9,744	$	2,434	$	947	$	38	$	-	$	77,841	$	(35,867	)	$	41,974
Average CQR		6,189		4,697		837		52		-		-		11,775		(3,651	)		8,124
Low CQR		-		-		324		-		-		62		386		-			386
Total	$	70,867	$	14,441	$	3,595	$	999	$	38	$	62	$	90,002	$	(39,518	)	$	50,484
Lease receivables:
High CQR	$	21,650	$	11,826	$	3,609	$	998	$	314	$	8	$	38,405	$	(9,518	)	$	28,887
Average CQR		22,447		9,415		1,921		646		106		-		34,535		(11,409	)		23,126
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	44,097	$	21,241	$	5,530	$	1,644	$	420	$	8	$	72,940	$	(20,927	)	$	52,013
Total amortized cost (1)	$	114,964	$	35,682	$	9,125	$	2,643	$	458	$	70	$	162,942	$	(60,445	)	$	102,497

(1) Unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $364 thousand are excluded from amortized cost.

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

The following table provides an aging analysis of our financing receivables as of September 30, 2020 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	925	$	270	$	823	$	2,018	$	10,105	$	12,123	$	77,879	$	90,002
Lease receivables		660		2,049		1,771		4,480		1,754		6,234		66,706		72,940
Total	$	1,585	$	2,319	$	2,594	$	6,498	$	11,859	$	18,357	$	144,585	$	162,942

The following table provides an aging analysis of our lease receivables by CQR as of March 31, 2020 (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
High CQR	$	951	$	105	$	922	$	1,978	$	1,181	$	33,581	$	36,740	$	(4,766	)	$	(19,823	)	$	12,151
Average CQR		46		107		112		265		1,106		31,381		32,752		(3,646	)		(18,693	)		10,413
Low CQR		-		-		-		-		-		-		-		-			-			-
Total	$	997	$	212	$	1,034	$	2,243	$	2,287	$	64,962	$	69,492	$	(8,412	)	$	(38,516	)	$	22,564

The following table provides an aging analysis of our notes receivable by CQR as of March 31, 2020 (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
High CQR	$	1,332	$	2	$	280	$	1,614	$	2,878	$	29,057	$	33,549	$	(18,341	)	$	15,208
Average CQR		140		44		142		326		1,135		19,995		21,456		(16,636	)		4,820
Low CQR		63		-		152		215		-		197		412		-			412
Total	$	1,535	$	46	$	574	$	2,155	$	4,013	$	49,249	$	55,417	$	(34,977	)	$	20,440

Our financial assets on nonaccrual status were not significant as of September 30, 2020, and March 31, 2020.

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PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

6 Months Ended

Sep. 30, 2020

PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES [Abstract]

PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

8. PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

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

	September 30, 2020		March 31, 2020
Other current assets:
Deposits & funds held in escrow	$	339	$	926
Prepaid assets		7,640		7,946
Other		254		384
Total	$	8,233	$	9,256
Property, equipment and other assets
Property and equipment, net	$	7,258	$	7,153
Deferred costs - non-current		12,568		10,957
Right-of-use assets		11,069		13,066
Other		3,419		1,420
Total	$	34,314	$	32,596
Other current liabilities:
Accrued expenses	$	10,639	$	10,024
Accrued income taxes payable		3,021		406
Contingent consideration - current		-		220
Short-term lease liability		4,698		4,815
Other		7,014		7,521
Total	$	25,372	$	22,986
Other liabilities:
Deferred revenue	$	19,074	$	16,693
Long-term lease liability		6,590		8,326
Other		7,278		2,708
Total	$	32,942	$	27,727

In the above table, deposits and funds held in escrow relate to financial assets that were sold to third-party banks. In conjunction with those sales, a portion of the proceeds was placed in escrow and will be released to us upon payment of outstanding invoices related to the underlying financing arrangements that were sold.

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CREDIT FACILITY AND NOTES PAYABLE

6 Months Ended

Sep. 30, 2020

CREDIT FACILITY AND NOTES PAYABLE [Abstract]

CREDIT FACILITY AND NOTES PAYABLE

9. CREDIT FACILITY AND NOTES PAYABLE

Credit Facility

Within our technology segment, ePlus Technology, inc. and certain of its subsidiaries finance their operations with funds generated from operations, and with a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). This facility provides short-term capital for our technology segment. There are two components of the WFCDF credit facility: (1) a floor plan component and (2) an accounts receivable component.

Under the floor plan component, we had outstanding balances of $219.0 million and $127.4 million as of September 30, 2020, and March 31, 2020, respectively, and are presented as accounts payable – floorplan. The fair value of the outstanding balance under the credit facility was equal to its carrying value as of September 30, 2020, and March 31, 2020.

On May 15, 2020, we executed an amendment to the WFCDF credit facility that increased the aggregate limit of the two components, except during a temporary uplift, to $275.0 million. Additionally, we have an election to temporarily increase the aggregate limit to $350.0 million for a period of not less than 30 days, provided that all such periods shall not exceed 150 days in the aggregate in any calendar year. Further, the amendment increased the limit on the accounts receivable component of the WFCDF credit facility to $100.0 million, changed the interest rate to two percent (2.00%) plus the greater of one month LIBOR or seventy-five hundredths of one percent (0.75%), and modified certain restrictions on ePlus Technology, inc.’s ability to pay dividends to ePlus inc.

As of September 30, 2020, the limit of the two components of the credit facility was $275 million, and the accounts receivable component had a sub-limit of $100 million. Under the accounts receivable component, we had no outstanding balance as of September 30, 2020 and $35 million outstanding as of March 31, 2020. The accounts receivable component is presented as recourse notes payable – current.

The WFCDF credit facility is secured by the assets of ePlus Technology, inc. and certain of its subsidiaries, and varies available borrowing based upon the value of their receivables and inventory. Additionally, the credit facility requires a guaranty of $10.5 million by ePlus inc.

The credit facility restricts the ability of ePlus Technology, inc. and certain of its subsidiaries to pay dividends to ePlus inc. unless their available borrowing meets certain thresholds. As of September 30, 2020, their available borrowing met the threshold such that there were no restricted net assets of ePlus Technology, inc.

The credit facility requires that financial statements of ePlus Technology, inc. and certain of its subsidiaries be provided within 45 days of each quarter and 90 days of each fiscal year end, and requires that other operational reports be provided on a regular basis. Either party may terminate with 90 days’ advance notice.

The loss of the WFCDF credit facility, including during circumstances related to COVID-19, 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.

On October 1, 2020, we elected to exercise the temporary increase in the aggregate limit of the WFCDF credit facility to $350.0 million for a period of  30 days.

Recourse Notes Payable

Recourse notes payable consist of borrowings that, in the event of default, the lender has recourse against us in addition to the assets serving as collateral.

As of September 30, 2020, and March 31, 2020, we had $2.3 million of recourse borrowings that were collateralized by investments in notes receivable and leases. Our principal and interest payments are generally due monthly in amounts that 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 these borrowings was 2.55% as of both September 30, 2020, and March 31, 2020.

Non-recourse Notes Payable

Non-recourse notes payable consists of borrowings that, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us. As of September 30, 2020, and March 31, 2020, we had $38.1 million and $35.5 million, respectively, of non-recourse borrowings that were collateralized by investments in notes and leases. Principal and interest payments 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 3.15% and 3.84%, as of September 30, 2020, and March 31, 2020, respectively.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Sep. 30, 2020

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company may be involved in routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate amount of liability, if any, for any claims of any type (either alone or in the aggregate) may materially and adversely affect the Company’s financial condition, results of operations and liquidity. In addition, the ultimate outcome of any litigation is uncertain. Any outcome, whether favorable or unfavorable, may materially and adversely affect the Company due to legal costs and expenses, diversion of management attention and other factors. The Company expenses legal costs in the period incurred. The Company cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against the Company in the future, and these matters could relate to prior, current or future transactions or events.

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EARNINGS PER SHARE

6 Months Ended

Sep. 30, 2020

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

11. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during each period.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three and six months ended September 30, 2020, and 2019, respectively (in thousands, except per share data).

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Net earnings attributable to common shareholders - basic and diluted	$	19,846	$	20,098	$	37,206	$	36,286
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		13,372		13,312		13,347		13,334
Effect of dilutive shares		19		38		47		74
Weighted average shares common outstanding — diluted		13,391		13,350		13,394		13,408
Earnings per common share - basic	$	1.48	$	1.51	$	2.79	$	2.72
Earnings per common share - diluted	$	1.48	$	1.51	$	2.78	$	2.71

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STOCKHOLDERS' EQUITY

6 Months Ended

Sep. 30, 2020

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

12. STOCKHOLDERS’ EQUITY

Share Repurchase Plan

On May 24, 2019, our board of directors authorized the repurchase of up to 500,000 shares of our outstanding common stock over a 12-month period beginning on May 28, 2019, and ending on May 27, 2020. 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.

On May 20, 2020, our board of directors authorized the repurchase of up to 500,000 shares of our outstanding common stock over a 12-month period beginning on May 28, 2020, and ending on May 27, 2021. 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, 2020, we purchased 24,318 shares of our outstanding common stock at a value of $1.8 million under the share repurchase plan; we also purchased 37,640 shares of common stock at a value of $2.7 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

During the six months ended September 30, 2019, we purchased 149,044 shares of our outstanding common stock at a value of $10.7 million under the share repurchase plan; we also purchased 41,817 shares of common stock at a value of $3.0 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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SHARE-BASED COMPENSATION

6 Months Ended

Sep. 30, 2020

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

13. SHARE-BASED COMPENSATION

Share-Based Plans

As of September 30, 2020, we had share-based awards outstanding under the following plans: (1) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”), and (2) the 2012 Employee Long-Term Incentive Plan ("2012 Employee LTIP"). These 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.

Restricted Stock Activity

For the six months ended September 30, 2020, we granted 9,309 restricted shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2019, we granted 8,132 restricted shares under the 2017 Director LTIP, and 85,132 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, 2020		193,580		$	73.74
Granted		99,182		$	71.81
Vested		(110,155	)	$	70.00
Forfeited		-		$	-
Nonvested September 30, 2020		182,607		$	74.95

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. For the six months ended September 30, 2020, the Company withheld 37,640 shares of common stock at a value of $2.7 million, which was included in treasury stock.

Compensation Expense

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. There are no additional conditions for vesting other than service conditions. During the three months ended September 30, 2020, and 2019, we recognized $1.8 million and $2.1 million of total share-based compensation expense, respectively. During the six months ended September 30, 2020, and 2019, we recognized $3.6 million and $4.1 million of total share-based compensation expense, respectively. Unrecognized compensation expense related to non-vested restricted stock was $11.6 million as of September 30, 2020, which will be fully recognized over the next 33 months.

We also provide our employees with a contributory 401(k) profit sharing plan, to which we may contribute from time to time at our sole discretion. Employer contributions to the plan are fully vested at all times. Our estimated contribution expense for the plan for both the three months ended September 30, 2020, and 2019, was $0.7 million, and $1.4 million for both the six months ended September 30, 2020, and 2019.

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INCOME TAXES

6 Months Ended

Sep. 30, 2020

INCOME TAXES [Abstract]

INCOME TAXES

14. INCOME TAXES

We account for our tax positions in accordance with Codification Topic 740, Income Taxes. Under the guidance, we evaluate uncertain tax positions based on the two-step approach. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. For tax positions that are not likely of  being sustained upon audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50 percent likely of being realized upon ultimate settlement.

Our total gross unrecognized tax benefits recorded for uncertain income tax, and interest and penalties thereon, were negligible as of September 30, 2020, and September 30, 2019. We had no additions or reductions to our gross unrecognized tax benefits during the six months ended September 30, 2020. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Sep. 30, 2020

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with Codification Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2020 and March 31, 2020 (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, 2020
Assets:
Money market funds	$	45,132	$	45,132	$	-	$	-
March 31, 2020
Assets:
Money market funds	$	128	$	128	$	-	$	-
Liabilities:
Contingent consideration	$	220	$	-	$	-	$	220

For the three and six months ended September 30, 2020, we did not record significant adjustments to our liability for contingent consideration arising from a past business combination. In August 2020, we paid $219 thousand to fully satisfy the obligations of our contingent consideration arrangement.

For the three and six months ended September 30, 2019, we recorded adjustments to operating expenses of $1.1 million and $1.5 million, respectively, that increased our liability for contingent consideration arising from our past business combinations. In September 2019, we reached a settlement in full of one of our contingent consideration arrangements in the amount of $9.6 million, that was paid in October 2019. Additionally, in September 2019, we paid $0.5 million to satisfy certain current obligations in another of these arrangements.

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BUSINESS COMBINATIONS

6 Months Ended

Sep. 30, 2020

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

16. BUSINESS COMBINATIONS

ABS Technology

On August 23, 2019, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of ABS Technology, a Virginia Beach, Virginia- headquartered solutions provider with deep expertise in managed services, networking, collaboration, and security solutions. ABS Technology enhances ePlus’ existing solutions portfolio and market position in Richmond and southern Virginia.

Our sum of consideration transferred was $15.3 million consisting of $13.8 million paid in cash at closing plus $1.7 million that was paid primarily during the year ended March 31, 2020, upon the collection of certain accounts receivable and less $0.2 million that was repaid to us in December 2019 due to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	Acquisition Date Amount
Accounts receivable		9,208
Other assets		743
Identified intangible assets		5,720
Accounts payable and other current liabilities		(6,715	)
Performance obligation		(1,140	)
Total identifiable net assets		7,816
Goodwill		7,461
Total purchase consideration	$	15,277

The identified intangible assets of $5.7 million consist of customer relationships with an estimated useful life of seven (7) years. The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables.

We recognized goodwill related to this transaction of $7.5 million, which was assigned to our technology reporting unit. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill is expected to be deductible for tax purposes. The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2019, is not material.

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SEGMENT REPORTING

6 Months Ended

Sep. 30, 2020

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

17. SEGMENT REPORTING

Our operations are conducted through two operating segments that are also both reportable segments. Our technology segment includes sales of IT products, third-party software, third-party maintenance, advanced professional and managed services, and our proprietary software to commercial enterprises, state and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors. We measure the performance of the segments based on operating income.

Our reportable segment information for the three- and six-month periods ended September 30, 2020, and 2019 are summarized in the following tables (in thousands):

	Three Months Ended
	September 30, 2020						September 30, 2019
	Technology		Financing		Total		Technology		Financing		Total
Sales
Product	$	369,934	$	13,722	$	383,656	$	349,650	$	13,847	$	363,497
Service		49,425		-		49,425		48,068		-		48,068
Net sales		419,359		13,722		433,081		397,718		13,847		411,565
Cost of Sales
Product		301,006		1,957		302,963		276,475		2,388		278,863
Service		31,156		-		31,156		29,671		-		29,671
Total cost of sales		332,162		1,957		334,119		306,146		2,388		308,534
Gross Profit		87,197		11,765		98,962		91,572		11,459		103,031
Selling, general, and administrative		62,586		4,303		66,889		67,189		3,334		70,523
Depreciation and amortization		3,313		28		3,341		3,529		28		3,557
Interest and financing costs		1		246		247		-		576		576
Operating expenses		65,900		4,577		70,477		70,718		3,938		74,656
Operating income		21,297		7,188		28,485		20,854		7,521		28,375
Other income						184						(40	)
Earnings before tax					$	28,669					$	28,335
Net Sales
Contracts with customers	$	412,357	$	1,028	$	413,385	$	394,585	$	1,411	$	395,996
Financing and other		7,002		12,694		19,696		3,133		12,436		15,569
Net Sales	$	419,359	$	13,722	$	433,081	$	397,718	$	13,847	$	411,565
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	3,499	$	1,182	$	4,681	$	3,658	$	1,455	$	5,113
Purchases of property, equipment and operating lease equipment	$	990	$	-	$	990	$	1,426	$	1,944	$	3,370
Selected Financial Data - Balance Sheet
Total assets	$	812,633	$	226,078	$	1,038,711	$	690,648	$	223,618	$	914,266

	Six Months Ended
	September 30, 2020						September 30, 2019
	Technology		Financing		Total		Technology		Financing		Total
Sales
Product	$	663,367	$	27,529	$	690,896	$	672,414	$	26,684	$	699,098
Service		97,216		-		97,216		93,839		-		93,839
Net sales		760,583		27,529		788,112		766,253		26,684		792,937
Cost of Sales
Product		525,549		4,048		529,597		534,529		4,397		538,926
Service		60,996		-		60,996		58,341		-		58,341
Total cost of sales		586,545		4,048		590,593		592,870		4,397		597,267
Gross Profit		174,038		23,481		197,519		173,383		22,287		195,670
Selling, general, and administrative		128,142		8,214		136,356		129,856		6,454		136,310
Depreciation and amortization		6,801		56		6,857		6,936		84		7,020
Interest and financing costs		266		558		824		-		1,204		1,204
Operating expenses		135,209		8,828		144,037		136,792		7,742		144,534
Operating income		38,829		14,653		53,482		36,591		14,545		51,136
Other income						282						(85	)
Earnings before tax					$	53,764					$	51,051
Net Sales
Contracts with customers	$	746,344	$	1,988	$	748,332	$	758,266	$	2,200	$	760,466
Financing and other		14,239		25,541		39,780		7,987		24,484		32,471
Net Sales	$	760,583	$	27,529	$	788,112	$	766,253	$	26,684	$	792,937
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	7,133	$	2,327	$	9,460	$	7,283	$	2,794	$	10,077
Purchases of property, equipment and operating lease equipment	$	3,101	$	166	$	3,267	$	2,675	$	2,213	$	4,888
Selected Financial Data - Balance Sheet
Total assets	$	812,633	$	226,078	$	1,038,711	$	690,648	$	223,618	$	914,266

Technology Segment Disaggregation of Revenue

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized for the three and six month periods ended September 30, 2020, and 2019 in the tables below (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Customer end market:
Technology	$	76,321		$	97,502		$	146,288		$	173,682
Telecom, Media & Entertainment		96,927			71,044			153,579			133,510
Financial Services		46,732			44,605			94,153			92,847
State and local government and educational institutions		76,492			71,866			147,055			143,057
Healthcare		59,252			59,818			105,788			115,926
All others		63,635			52,883			113,720			107,231
Net sales		419,359			397,718			760,583			766,253
Less: Revenue from financing and other		(7,002	)		(3,133	)		(14,239	)		(7,987	)
Revenue from contracts with customers	$	412,357		$	394,585		$	746,344		$	758,266

	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Vendor
Cisco Systems	$	173,166		$	172,605		$	301,098		$	318,786
NetApp		9,914			9,771			25,335			23,198
HP Inc. & HPE		16,395			18,986			33,433			42,099
Dell EMC		15,349			12,494			46,430			26,275
Arista Networks		13,443			26,766			20,263			47,716
Juniper Networks		24,716			24,370			38,295			31,424
All others		166,376			132,726			295,729			276,755
Net sales		419,359			397,718			760,583			766,253
Less: Revenue from financing and other		(7,002	)		(3,133	)		(14,239	)		(7,987	)
Revenue from contracts with customers	$	412,357		$	394,585		$	746,344		$	758,266

Financing Segment Disaggregation of Revenue

We analyze our revenues within our financing segment based on the nature of the arrangement, and our revenues from contracts with customers consist of proceeds from the sale of off-lease equipment.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Sep. 30, 2020

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses acquired are included in the unaudited consolidated financial statements from the dates of acquisition.

INTERIM FINANCIAL STATEMENTS

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the six months ended September 30, 2020, and 2019, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the six months ended September 30, 2020, and 2019 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2021, or any other future period. These unaudited consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2020 (“2020 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.

USE OF ESTIMATES

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

CONCENTRATIONS OF RISK

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 41% and 43% of our technology segment’s net sales for the three months ended September 30, 2020, and 2019, respectively, and 40% and 42% of our technology segment’s net sales for the six months ended September 30, 2020, and 2019, respectively.

ALLOWANCE FOR CREDIT LOSSES

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We charge off uncollectable financing receivables when we stop pursuing collection.

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RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

6 Months Ended

Sep. 30, 2020

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

CREDIT LOSSES — We adopted ASU 2016-13 on April 1, 2020. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Our adoption of this update, including the cumulative-effect adjustment to retained earnings, is not significant to our financial statements. Refer to Note 7, “Allowance for Credit Losses” for additional information.

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REVENUES (Tables)

6 Months Ended

Sep. 30, 2020

REVENUES [Abstract]

Balance of Receivables, Contract Assets, and Contract Liabilities

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $41.3 million and $33.1 million of receivables from contracts with customers included within financing receivables as of September 30, 2020, and March 31, 2020, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

Contract liabilities	September 30, 2020		March 31, 2020
Current (included in deferred revenue)	$	58,267	$	54,486
Non-current (included in other liabilities)	$	18,794	$	16,395

Remaining Performance Obligations

The following table includes revenue expected to be recognized in the future related to performance obligations, primarily non-cancelable contracts for ePlus managed services, that are unsatisfied or partially unsatisfied at the end of the reporting period, (in thousands).

Remainder of Year ending March 31, 2021	$	20,527
Year Ending March 31, 2022		18,889
Year Ending March 31, 2023		8,385
Year Ending March 31, 2024		2,026
Year Ending March 31, 2025		516
Year Ending March 31, 2026 and thereafter		111
Total remaining performance obligations	$	50,454

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FINANCING RECEIVABLES AND OPERATING LEASES (Tables)

6 Months Ended

Sep. 30, 2020

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

Sales-type Leases

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three and six months ended September 30, 2020, and 2019 (in thousands):

	Three months ended September 30, 2020		Three months ended September 30, 2019		Six months ended September 30, 2020		Six months ended September 30, 2019
Net sales	$	7,655	$	3,133	$	17,818	$	7,987
Cost of sales		5,402		2,702		10,729		6,652
Gross profit	$	2,253	$	431	$	7,089	$	1,335

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three and six months ended September 30, 2020, and 2019 (in thousands):

	Three months ended September 30 2020		Three months ended September 30, 2019		Six months ended September 30, 2020		Six months ended September 30, 2019
Interest income on sales-type leases	$	1,884	$	1,495	$	4,103	$	3,590
Lease income on operating leases	$	3,900	$	5,059	$	7,738	$	10,418

Notes Receivable Net and Investments in Leases

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

September 30, 2020	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	90,002		$	76,700		$	166,702
Unguaranteed residual value (1)		-			20,213			20,213
Initial direct costs, net of amortization		364			-			364
Unearned income		-			(11,329	)		(11,329	)
Reserve for credit losses (2)		(1,337	)		(1,227	)		(2,564	)
Total, net	$	89,029		$	84,357		$	173,386
Reported as:
Current	$	52,397		$	40,369		$	92,766
Long-term		36,632			43,988			80,620
Total, net	$	89,029		$	84,357		$	173,386

(1) Includes unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable.

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

March 31, 2020	Notes Receivable			Lease Receivables			Financing Receivables
Minimum payments	$	55,417		$	69,492		$	124,909
Estimated unguaranteed residual value (1)		-			21,862			21,862
Initial direct costs, net of amortization		212			247			459
Unearned income		-			(11,612	)		(11,612	)
Reserve for credit losses (2)		(798	)		(610	)		(1,408	)
Total, net	$	54,831		$	79,379		$	134,210
Reported as:
Current	$	31,181		$	38,988		$	70,169
Long-term		23,650			40,391			64,041
Total, net	$	54,831		$	79,379		$	134,210

(1) Includes unguaranteed residual values of $14,972 thousand for sales type leases, which have been sold and accounted for as sales.

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

Future Scheduled Minimum Lease Payments

The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of September 30, 2020 (in thousands):

Remainder of the Year ending March 31, 2021	$	46,006
Year Ending March 31, 2022		19,376
Year Ending March 31, 2023		8,196
Year Ending March 31, 2024		2,205
Year Ending March 31, 2025 and thereafter		917
Total	$	76,700

Investment in Operating Lease Equipment - Net

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

	September 30, 2020			March 31, 2020
Cost of equipment under operating leases	$	19,578		$	21,276
Accumulated depreciation		(12,272	)		(11,159	)
Investment in operating lease equipment—net (1)	$	7,306		$	10,117

(1) Amounts include estimated unguaranteed residual values of $2.5 million and $3.1 million as of September 30, 2020, and March 31, 2020, respectively.

Future Minimum Rental Payments for Operating Leases

The following table provides the future scheduled minimum lease rental payments for operating leases as of September 30, 2020 (in thousands):

Remainder of the Year ending March 31, 2021	$	1,534
Year Ending March 31, 2022		1,927
Year Ending March 31, 2023		1,436
Year Ending March 31, 2024		477
Year Ending March 31, 2025 and thereafter		35
Total	$	5,409

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LESSEE ACCOUNTING (Tables)

6 Months Ended

Sep. 30, 2020

LESSEE ACCOUNTING [Abstract]

Supplemental Information of Remaining Lease Terms and Discount Rates

The following table provides supplemental information about the remaining lease terms and discount rates applied as of September 30, 2020, and March 31, 2020:

Lease term and Discount Rate	September 30, 2020			March 31, 2020
Weighted average remaining lease term (months)		34			38
Weighted average discount rate		3.8	%		3.9	%

Future Lease Payments Under Operating Leases

The following table provides our future lease payments under our operating leases as of September 30, 2020 (in thousands):

	September 30, 2020
Remainder of the year ending March 31, 2021	$	2,432
Year ending March 31, 2022		4,319
Year ending March 31, 2023		3,093
Year ending March 31, 2024		1,249
Year ending March 31, 2025 and thereafter		813
Total lease payments	$	11,906
Less: interest		(617	)
Present value of lease liabilities	$	11,289

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Sep. 30, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Other Intangible Assets

Our other intangible assets consist of the following on September 30, 2020, and March 31, 2020 (in thousands):

	September 30, 2020							March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships & other intangibles	$	63,093	$	(37,467	)	$	25,626	$	63,006	$	(33,000	)	$	30,006
Capitalized software development		11,176		(6,537	)		4,639		10,385		(5,927	)		4,458
Total	$	74,269	$	(44,004	)	$	30,265	$	73,391	$	(38,927	)	$	34,464

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ALLOWANCE FOR CREDIT LOSSES (Tables)

6 Months Ended

Sep. 30, 2020

ALLOWANCE FOR CREDIT LOSSES [Abstract]

Activity in Reserves for Credit Losses

The following table provides the activity in our allowance for credit losses for the six months ended September 30, 2020, and 2019 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2020	$	1,781		$	798		$	610		$	3,189
Provision for credit losses		576			566			624			1,766
Write-offs and other		(27	)		(27	)		(7	)		(61	)
Balance September 30, 2020	$	2,330		$	1,337		$	1,227		$	4,894

	Accounts Receivable			Notes Receivable		Lease Receivables			Total
Balance April 1, 2019	$	1,579		$	505	$	530		$	2,614
Provision for credit losses		311			15		(27	)		299
Write-offs and other		(42	)		-		(3	)		(45	)
Balance September 30, 2019	$	1,848		$	520	$	500		$	2,868

Allowance for Credit Losses and Minimum Payments Associated with Notes Receivable and Lease Related Receivables Disaggregated Based on Impairment Method

The following table provides our allowance for credit losses and minimum payments associated with our notes receivables and lease-related receivables disaggregated based on our impairment method as of March 31, 2020 (in thousands):

	March 31, 2020
	Notes Receivable		Lease Receivables
Allowance for credit losses:
Ending balance: collectively evaluated for impairment	$	736	$	610
Ending balance: individually evaluated for impairment		62		-
Ending balance	$	798	$	610
Minimum payments:
Ending balance: collectively evaluated for impairment	$	55,005	$	69,492
Ending balance: individually evaluated for impairment		412		-
Ending balance	$	55,417	$	69,492

Amortized Cost Basis of Financing Receivables by CQR and Credit Origination Year

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of September 30, 2020 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2021		2020		2019		2018		2017		2016 and prior		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	64,678	$	9,744	$	2,434	$	947	$	38	$	-	$	77,841	$	(35,867	)	$	41,974
Average CQR		6,189		4,697		837		52		-		-		11,775		(3,651	)		8,124
Low CQR		-		-		324		-		-		62		386		-			386
Total	$	70,867	$	14,441	$	3,595	$	999	$	38	$	62	$	90,002	$	(39,518	)	$	50,484
Lease receivables:
High CQR	$	21,650	$	11,826	$	3,609	$	998	$	314	$	8	$	38,405	$	(9,518	)	$	28,887
Average CQR		22,447		9,415		1,921		646		106		-		34,535		(11,409	)		23,126
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	44,097	$	21,241	$	5,530	$	1,644	$	420	$	8	$	72,940	$	(20,927	)	$	52,013
Total amortized cost (1)	$	114,964	$	35,682	$	9,125	$	2,643	$	458	$	70	$	162,942	$	(60,445	)	$	102,497

(1) Unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $364 thousand are excluded from amortized cost.

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

Aging Analysis of Financing Receivables

The following table provides an aging analysis of our financing receivables as of September 30, 2020 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	925	$	270	$	823	$	2,018	$	10,105	$	12,123	$	77,879	$	90,002
Lease receivables		660		2,049		1,771		4,480		1,754		6,234		66,706		72,940
Total	$	1,585	$	2,319	$	2,594	$	6,498	$	11,859	$	18,357	$	144,585	$	162,942

Aging Analysis of Financing Receivables by CQR

The following table provides an aging analysis of our lease receivables by CQR as of March 31, 2020 (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
High CQR	$	951	$	105	$	922	$	1,978	$	1,181	$	33,581	$	36,740	$	(4,766	)	$	(19,823	)	$	12,151
Average CQR		46		107		112		265		1,106		31,381		32,752		(3,646	)		(18,693	)		10,413
Low CQR		-		-		-		-		-		-		-		-			-			-
Total	$	997	$	212	$	1,034	$	2,243	$	2,287	$	64,962	$	69,492	$	(8,412	)	$	(38,516	)	$	22,564

The following table provides an aging analysis of our notes receivable by CQR as of March 31, 2020 (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
High CQR	$	1,332	$	2	$	280	$	1,614	$	2,878	$	29,057	$	33,549	$	(18,341	)	$	15,208
Average CQR		140		44		142		326		1,135		19,995		21,456		(16,636	)		4,820
Low CQR		63		-		152		215		-		197		412		-			412
Total	$	1,535	$	46	$	574	$	2,155	$	4,013	$	49,249	$	55,417	$	(34,977	)	$	20,440

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PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES (Tables)

6 Months Ended

Sep. 30, 2020

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, 2020		March 31, 2020
Other current assets:
Deposits & funds held in escrow	$	339	$	926
Prepaid assets		7,640		7,946
Other		254		384
Total	$	8,233	$	9,256
Property, equipment and other assets
Property and equipment, net	$	7,258	$	7,153
Deferred costs - non-current		12,568		10,957
Right-of-use assets		11,069		13,066
Other		3,419		1,420
Total	$	34,314	$	32,596
Other current liabilities:
Accrued expenses	$	10,639	$	10,024
Accrued income taxes payable		3,021		406
Contingent consideration - current		-		220
Short-term lease liability		4,698		4,815
Other		7,014		7,521
Total	$	25,372	$	22,986
Other liabilities:
Deferred revenue	$	19,074	$	16,693
Long-term lease liability		6,590		8,326
Other		7,278		2,708
Total	$	32,942	$	27,727

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EARNINGS PER SHARE (Tables)

6 Months Ended

Sep. 30, 2020

EARNINGS PER SHARE [Abstract]

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

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three and six months ended September 30, 2020, and 2019, respectively (in thousands, except per share data).

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Net earnings attributable to common shareholders - basic and diluted	$	19,846	$	20,098	$	37,206	$	36,286
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		13,372		13,312		13,347		13,334
Effect of dilutive shares		19		38		47		74
Weighted average shares common outstanding — diluted		13,391		13,350		13,394		13,408
Earnings per common share - basic	$	1.48	$	1.51	$	2.79	$	2.72
Earnings per common share - diluted	$	1.48	$	1.51	$	2.78	$	2.71

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Sep. 30, 2020

SHARE-BASED COMPENSATION [Abstract]

Summary of Non-vested Restricted Shares

For the six months ended September 30, 2020, we granted 9,309 restricted shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2019, we granted 8,132 restricted shares under the 2017 Director LTIP, and 85,132 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, 2020		193,580		$	73.74
Granted		99,182		$	71.81
Vested		(110,155	)	$	70.00
Forfeited		-		$	-
Nonvested September 30, 2020		182,607		$	74.95

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Sep. 30, 2020

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Fair Value Hierarchy of Financial Instruments

We account for the fair values of our assets and liabilities in accordance with Codification Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2020 and March 31, 2020 (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, 2020
Assets:
Money market funds	$	45,132	$	45,132	$	-	$	-
March 31, 2020
Assets:
Money market funds	$	128	$	128	$	-	$	-
Liabilities:
Contingent consideration	$	220	$	-	$	-	$	220

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BUSINESS COMBINATIONS (Tables)

6 Months Ended

Sep. 30, 2020

BUSINESS COMBINATIONS [Abstract]

Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed

Our sum of consideration transferred was $15.3 million consisting of $13.8 million paid in cash at closing plus $1.7 million that was paid primarily during the year ended March 31, 2020, upon the collection of certain accounts receivable and less $0.2 million that was repaid to us in December 2019 due to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	Acquisition Date Amount
Accounts receivable		9,208
Other assets		743
Identified intangible assets		5,720
Accounts payable and other current liabilities		(6,715	)
Performance obligation		(1,140	)
Total identifiable net assets		7,816
Goodwill		7,461
Total purchase consideration	$	15,277

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SEGMENT REPORTING (Tables)

6 Months Ended

Sep. 30, 2020

SEGMENT REPORTING [Abstract]

Segment Reporting Information, by Reportable Segment

Our reportable segment information for the three- and six-month periods ended September 30, 2020, and 2019 are summarized in the following tables (in thousands):

	Three Months Ended
	September 30, 2020						September 30, 2019
	Technology		Financing		Total		Technology		Financing		Total
Sales
Product	$	369,934	$	13,722	$	383,656	$	349,650	$	13,847	$	363,497
Service		49,425		-		49,425		48,068		-		48,068
Net sales		419,359		13,722		433,081		397,718		13,847		411,565
Cost of Sales
Product		301,006		1,957		302,963		276,475		2,388		278,863
Service		31,156		-		31,156		29,671		-		29,671
Total cost of sales		332,162		1,957		334,119		306,146		2,388		308,534
Gross Profit		87,197		11,765		98,962		91,572		11,459		103,031
Selling, general, and administrative		62,586		4,303		66,889		67,189		3,334		70,523
Depreciation and amortization		3,313		28		3,341		3,529		28		3,557
Interest and financing costs		1		246		247		-		576		576
Operating expenses		65,900		4,577		70,477		70,718		3,938		74,656
Operating income		21,297		7,188		28,485		20,854		7,521		28,375
Other income						184						(40	)
Earnings before tax					$	28,669					$	28,335
Net Sales
Contracts with customers	$	412,357	$	1,028	$	413,385	$	394,585	$	1,411	$	395,996
Financing and other		7,002		12,694		19,696		3,133		12,436		15,569
Net Sales	$	419,359	$	13,722	$	433,081	$	397,718	$	13,847	$	411,565
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	3,499	$	1,182	$	4,681	$	3,658	$	1,455	$	5,113
Purchases of property, equipment and operating lease equipment	$	990	$	-	$	990	$	1,426	$	1,944	$	3,370
Selected Financial Data - Balance Sheet
Total assets	$	812,633	$	226,078	$	1,038,711	$	690,648	$	223,618	$	914,266

	Six Months Ended
	September 30, 2020						September 30, 2019
	Technology		Financing		Total		Technology		Financing		Total
Sales
Product	$	663,367	$	27,529	$	690,896	$	672,414	$	26,684	$	699,098
Service		97,216		-		97,216		93,839		-		93,839
Net sales		760,583		27,529		788,112		766,253		26,684		792,937
Cost of Sales
Product		525,549		4,048		529,597		534,529		4,397		538,926
Service		60,996		-		60,996		58,341		-		58,341
Total cost of sales		586,545		4,048		590,593		592,870		4,397		597,267
Gross Profit		174,038		23,481		197,519		173,383		22,287		195,670
Selling, general, and administrative		128,142		8,214		136,356		129,856		6,454		136,310
Depreciation and amortization		6,801		56		6,857		6,936		84		7,020
Interest and financing costs		266		558		824		-		1,204		1,204
Operating expenses		135,209		8,828		144,037		136,792		7,742		144,534
Operating income		38,829		14,653		53,482		36,591		14,545		51,136
Other income						282						(85	)
Earnings before tax					$	53,764					$	51,051
Net Sales
Contracts with customers	$	746,344	$	1,988	$	748,332	$	758,266	$	2,200	$	760,466
Financing and other		14,239		25,541		39,780		7,987		24,484		32,471
Net Sales	$	760,583	$	27,529	$	788,112	$	766,253	$	26,684	$	792,937
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	7,133	$	2,327	$	9,460	$	7,283	$	2,794	$	10,077
Purchases of property, equipment and operating lease equipment	$	3,101	$	166	$	3,267	$	2,675	$	2,213	$	4,888
Selected Financial Data - Balance Sheet
Total assets	$	812,633	$	226,078	$	1,038,711	$	690,648	$	223,618	$	914,266

Technology Segment Disaggregation of Revenue

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized for the three and six month periods ended September 30, 2020, and 2019 in the tables below (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Customer end market:
Technology	$	76,321		$	97,502		$	146,288		$	173,682
Telecom, Media & Entertainment		96,927			71,044			153,579			133,510
Financial Services		46,732			44,605			94,153			92,847
State and local government and educational institutions		76,492			71,866			147,055			143,057
Healthcare		59,252			59,818			105,788			115,926
All others		63,635			52,883			113,720			107,231
Net sales		419,359			397,718			760,583			766,253
Less: Revenue from financing and other		(7,002	)		(3,133	)		(14,239	)		(7,987	)
Revenue from contracts with customers	$	412,357		$	394,585		$	746,344		$	758,266

	Three Months Ended September 30,						Six Months Ended September 30,
	2020			2019			2020			2019
Vendor
Cisco Systems	$	173,166		$	172,605		$	301,098		$	318,786
NetApp		9,914			9,771			25,335			23,198
HP Inc. & HPE		16,395			18,986			33,433			42,099
Dell EMC		15,349			12,494			46,430			26,275
Arista Networks		13,443			26,766			20,263			47,716
Juniper Networks		24,716			24,370			38,295			31,424
All others		166,376			132,726			295,729			276,755
Net sales		419,359			397,718			760,583			766,253
Less: Revenue from financing and other		(7,002	)		(3,133	)		(14,239	)		(7,987	)
Revenue from contracts with customers	$	412,357		$	394,585		$	746,344		$	758,266

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Net Sales [Member] | Cisco Systems [Member] | Technology Segment [Member]
Concentration of risk [Abstract]
Percentage of concentration risk	41.00%	43.00%	40.00%	42.00%

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REVENUES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Contract with Customer, Asset and Liability [Abstract]
Accounts receivable - trade	$ 41,300		$ 41,300		$ 33,100
Current (included in deferred revenue)	58,267		58,267		54,486
Non-current (included in other liabilities)	18,794		18,794		$ 16,395
Revenue recognized from the beginning contract liability	11,300	$ 13,600	26,900	$ 29,400
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	50,454		50,454
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 20,527		$ 20,527
Expected timing of satisfaction, period	6 months		6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 18,889		$ 18,889
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 8,385		$ 8,385
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 2,026		$ 2,026
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 516		$ 516
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 111		$ 111
Expected timing of satisfaction, period

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FINANCING RECEIVABLES AND OPERATING LEASES (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Sep. 30, 2020		Sep. 30, 2019	Sep. 30, 2020		Sep. 30, 2019	Mar. 31, 2020		Mar. 31, 2019
Profit Recognized for Sales-type Leases [Abstract]
Net sales		$ 7,655		$ 3,133	$ 17,818		$ 7,987
Cost of sales		5,402		2,702	10,729		6,652
Gross Profit		2,253		431	7,089		1,335
Interest Income on Sales-type Leases [Abstract]
Interest Income on sales-type leases		1,884		1,495	4,103		3,590
Lease income on operating leases		3,900		5,059	7,738		10,418
Financing Receivables [Abstract]
Estimated unguaranteed residual value		12,644			12,644
Initial direct costs, net of amortization		364			364
Reserve for credit losses		(4,894)		(2,868)	(4,894)		(2,868)	$ (3,189)		$ (2,614)
Reported as [Abstract]
Current		92,766			92,766			70,169
Future scheduled minimum lease payments [Abstract]
Remainder of year ending March 31, 2021		46,006			46,006
Year ending March 31, 2022		19,376			19,376
Year ending March 31, 2023		8,196			8,196
Year ending March 31, 2024		2,205			2,205
Year ending March 31, 2025 and thereafter		917			917
Total		76,700			76,700
Estimated unguaranteed residual values for direct financing lease		12,644			12,644			14,972
Investment in operating lease equipment - net [Abstract]
Cost of equipment under operating leases		19,578			19,578			21,276
Accumulated depreciation		(12,272)			(12,272)			(11,159)
Investment in operating lease equipment - net	[1]	7,306			7,306			10,117
Unguaranteed residual value of operating lease equipment net		2,500			2,500			3,100
Future scheduled minimum lease rental payments [Abstract]
Remainder of year ending March 31, 2021		1,534			1,534
Year ending March 31, 2022		1,927			1,927
Year ending March 31, 2023		1,436			1,436
Year ending March 31, 2024		477			477
Year ending March 31, 2025 and thereafter		35			35
Total		5,409			5,409
Collateral for non-recourse notes payable - Finance receivables		33,700			33,700			34,600
Collateral for non-recourse notes payable - Operating leases		4,900			4,900			6,700
Gain on sale of financing receivables		4,500		4,100	7,000		7,500
Proceeds from sale of financing receivables		118,500		95,100	191,700		172,000
Contract liabilities - servicing of financial assets		400			400			400
Notes Receivables [Member]
Financing Receivables [Abstract]
Minimum payments		90,002			90,002			55,417
Estimated unguaranteed residual value		0	[2]		0	[2]		0	[3]
Initial direct costs, net of amortization	[4]	364			364			212
Unearned income		0			0			0
Reserve for credit losses		(1,337)	[4]	(520)	(1,337)	[4]	(520)	(798)	[4]	(505)
Total, net		89,029			89,029			54,831
Reported as [Abstract]
Current		52,397			52,397			31,181
Long-term		36,632			36,632			23,650
Total, net		89,029			89,029			54,831
Lease Receivables [Member]
Financing Receivables [Abstract]
Minimum payments		76,700			76,700			69,492
Estimated unguaranteed residual value		20,213	[2]		20,213	[2]		21,862	[3]
Initial direct costs, net of amortization	[4]	0			0			247
Unearned income		(11,329)			(11,329)			(11,612)
Reserve for credit losses		(1,227)	[4]	$ (500)	(1,227)	[4]	$ (500)	(610)	[4]	$ (530)
Total, net		84,357			84,357			79,379
Reported as [Abstract]
Current		40,369			40,369			38,988
Long-term		43,988			43,988			40,391
Total, net		84,357			84,357			79,379
Financing Receivables [Member]
Financing Receivables [Abstract]
Minimum payments		166,702			166,702			124,909
Estimated unguaranteed residual value		20,213	[2]		20,213	[2]		21,862	[3]
Initial direct costs, net of amortization	[4]	364			364			459
Unearned income		(11,329)			(11,329)			(11,612)
Reserve for credit losses	[4]	(2,564)			(2,564)			(1,408)
Total, net		173,386			173,386			134,210
Reported as [Abstract]
Current		92,766			92,766			70,169
Long-term		80,620			80,620			64,041
Total, net		$ 173,386			$ 173,386			$ 134,210

[1] Amounts include estimated unguaranteed residual values of $2.5 million and $3.1 million as of September 30, 2020, and March 31, 2020, respectively.

[2] Includes unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable.

[3] Includes unguaranteed residual values of $14,972 thousand for sales type leases, which have been sold and accounted for as sales.

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

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LESSEE ACCOUNTING (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Lessee, Operating Lease [Abstract]
Rent expense	$ 1,500	$ 1,500	$ 3,100	$ 3,100
Lease Term and Discount Rate [Abstract]
Weighted average remaining lease term (months)	34 months		34 months		38 months
Weighted average discount rate	3.80%		3.80%		3.90%
Future Lease Payments under Operating Leases [Abstract]
Remainder of year ending March 31, 2021	$ 2,432		$ 2,432
Year ending March 31, 2022	4,319		4,319
Year ending March 31, 2023	3,093		3,093
Year ending March 31, 2024	1,249		1,249
Year ending March 31, 2025 and thereafter	813		813
Total lease payments	11,906		11,906
Less: Interest	(617)		(617)
Present value of lease liabilities	$ 11,289		$ 11,289
Maximum [Member]
Lessee, Operating Lease [Abstract]
Operating lease term	6 years		6 years

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GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Sep. 30, 2020 USD ($) Unit	Mar. 31, 2020 USD ($) Unit
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]
Carrying value of goodwill	$ 118,177	$ 118,097
Change in foreign currency translation	$ 100
Number of reporting units | Unit	1	1
Percentage change in the fair value	10.00%

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GOODWILL AND OTHER INTANGIBLE ASSETS, Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Other Intangible Assets [Abstract]
Gross carrying amount	$ 74,269		$ 74,269		$ 73,391
Accumulated amortization	(44,004)		(44,004)		(38,927)
Net carrying amount	30,265		30,265		34,464
Total amortization expense for other intangible assets	2,500	$ 2,500	5,000	$ 4,900
Customer Relationships and Other Intangibles [Member]
Other Intangible Assets [Abstract]
Gross carrying amount	63,093		63,093		63,006
Accumulated amortization	(37,467)		(37,467)		(33,000)
Net carrying amount	25,626		$ 25,626		30,006
Customer Relationships and Other Intangibles [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life			5 years
Customer Relationships and Other Intangibles [Member] | Maximum [Member]
Other Intangible Assets [Abstract]
Estimated useful life			10 years
Capitalized Software Development [Member]
Other Intangible Assets [Abstract]
Gross carrying amount	11,176		$ 11,176		10,385
Accumulated amortization	(6,537)		(6,537)		(5,927)
Net carrying amount	$ 4,639		$ 4,639		$ 4,458
Capitalized Software Development [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life			5 years

XML

ALLOWANCE FOR CREDIT LOSSES, Activity (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2020		Sep. 30, 2019
Activity in reserves for credit losses [Roll Forward]
Balance	$ 3,189		$ 2,614
Provision for credit losses	1,766		299
Write-offs and other	(61)		(45)
Balance	4,894		2,868
Accounts Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,781		1,579
Provision for credit losses	576		311
Write-offs and other	(27)		(42)
Balance	2,330		1,848
Notes Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	798	[1]	505
Provision for credit losses	566		15
Write-offs and other	(27)		0
Balance	1,337	[1]	520
Lease Receivables [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	610	[1]	530
Provision for credit losses	624		(27)
Write-offs and other	(7)		(3)
Balance	$ 1,227	[1]	$ 500

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

XML

ALLOWANCE FOR CREDIT LOSSES, Disaggregated Based on Impairment (Details) - USD ($) $ in Thousands	Sep. 30, 2020		Mar. 31, 2020		Sep. 30, 2019	Mar. 31, 2019
Allowance for credit losses [Abstract]
Ending balance	$ 4,894		$ 3,189		$ 2,868	$ 2,614
Notes Receivable [Member]
Allowance for credit losses [Abstract]
Ending balance: collectively evaluated for impairment			736
Ending balance: individually evaluated for impairment			62
Ending balance	1,337	[1]	798	[1]	520	505
Minimum payments [Abstract]
Ending balance: collectively evaluated for impairment			55,005
Ending balance: individually evaluated for impairment			412
Ending balance			55,417
Lease Receivables [Member]
Allowance for credit losses [Abstract]
Ending balance: collectively evaluated for impairment			610
Ending balance: individually evaluated for impairment			0
Ending balance	$ 1,227	[1]	610	[1]	$ 500	$ 530
Minimum payments [Abstract]
Ending balance: collectively evaluated for impairment			69,492
Ending balance: individually evaluated for impairment			0
Ending balance			$ 69,492

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

XML

ALLOWANCE FOR CREDIT LOSSES, Amortized Cost Basis (Details) - USD ($) $ in Thousands		6 Months Ended
		Sep. 30, 2020		Mar. 31, 2020
Credit Risk Profile, Segregated by Class [Abstract]
2021	[1]	$ 114,964
2020	[1]	35,682
2019	[1]	9,125
2018	[1]	2,643
2017	[1]	458
2016 and prior	[1]	70
Total	[1]	162,942
Transfers	[1],[2]	(60,445)
Net credit exposure	[1]	102,497
Unguaranteed residual value		12,644
Lease receivable and initial direct costs of notes receivable, net of amortization		364
Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		70,867
2020		14,441
2019		3,595
2018		999
2017		38
2016 and prior		62
Total		90,002
Transfers	[2]	(39,518)
Net credit exposure		50,484
Unguaranteed residual value		0	[3]	$ 0	[4]
Lease receivable and initial direct costs of notes receivable, net of amortization	[5]	364		212
Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		44,097
2020		21,241
2019		5,530
2018		1,644
2017		420
2016 and prior		8
Total		72,940
Transfers	[2]	(20,927)
Net credit exposure		52,013
Unguaranteed residual value		20,213	[3]	21,862	[4]
Lease receivable and initial direct costs of notes receivable, net of amortization	[5]	$ 0		$ 247
High CQR [Member] | Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		1.00%
High CQR [Member] | Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		$ 64,678
2020		9,744
2019		2,434
2018		947
2017		38
2016 and prior		0
Total		77,841
Transfers	[2]	(35,867)
Net credit exposure		41,974
High CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		21,650
2020		11,826
2019		3,609
2018		998
2017		314
2016 and prior		8
Total		38,405
Transfers	[2]	(9,518)
Net credit exposure		$ 28,887
Average CQR [Member] | Minimum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		2.00%
Average CQR [Member] | Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		10.00%
Average CQR [Member] | Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		$ 6,189
2020		4,697
2019		837
2018		52
2017		0
2016 and prior		0
Total		11,775
Transfers	[2]	(3,651)
Net credit exposure		8,124
Average CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		22,447
2020		9,415
2019		1,921
2018		646
2017		106
2016 and prior		0
Total		34,535
Transfers	[2]	(11,409)
Net credit exposure		$ 23,126
Low CQR [Member] | Minimum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		10.00%
Low CQR [Member] | Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		100.00%
Low CQR [Member] | Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		$ 0
2020		0
2019		324
2018		0
2017		0
2016 and prior		62
Total		386
Transfers	[2]	0
Net credit exposure		386
Low CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2021		0
2020		0
2019		0
2018		0
2017		0
2016 and prior		0
Total		0
Transfers	[2]	0
Net credit exposure		$ 0

[1] Unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $364 thousand are excluded from amortized cost.

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

[3] Includes unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable.

[4] Includes unguaranteed residual values of $14,972 thousand for sales type leases, which have been sold and accounted for as sales.

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

XML

ALLOWANCE FOR CREDIT LOSSES, Aging Analysis (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Mar. 31, 2020
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		$ 6,498
Current		11,859
Billed		18,357
Unbilled		144,585
Total	[1]	162,942
Non-recourse notes payable		(275,000)
Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		2,018	$ 2,155
Current		10,105	4,013
Billed		12,123
Unbilled		77,879
Total		90,002
Unbilled minimum lease payments			49,249
Total minimum lease payments		90,002	55,417
Non-recourse notes payable			(34,977)
Net credit exposure			20,440
Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		4,480	2,243
Current		1,754	2,287
Billed		6,234
Unbilled		66,706
Total		72,940
Unbilled minimum lease payments			64,962
Total minimum lease payments		76,700	69,492
Unearned income			(8,412)
Non-recourse notes payable			(38,516)
Net credit exposure			22,564
High CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			1,614
Current			2,878
Total		77,841
Unbilled minimum lease payments			29,057
Total minimum lease payments			33,549
Non-recourse notes payable			(18,341)
Net credit exposure			15,208
High CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			1,978
Current			1,181
Total		38,405
Unbilled minimum lease payments			33,581
Total minimum lease payments			36,740
Unearned income			(4,766)
Non-recourse notes payable			(19,823)
Net credit exposure			12,151
Average CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			326
Current			1,135
Total		11,775
Unbilled minimum lease payments			19,995
Total minimum lease payments			21,456
Non-recourse notes payable			(16,636)
Net credit exposure			4,820
Average CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			265
Current			1,106
Total		34,535
Unbilled minimum lease payments			31,381
Total minimum lease payments			32,752
Unearned income			(3,646)
Non-recourse notes payable			(18,693)
Net credit exposure			10,413
Low CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			215
Current			0
Total		386
Unbilled minimum lease payments			197
Total minimum lease payments			412
Non-recourse notes payable			0
Net credit exposure			412
Low CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			0
Current			0
Total		0
Unbilled minimum lease payments			0
Total minimum lease payments			0
Unearned income			0
Non-recourse notes payable			0
Net credit exposure			0
31 to 60 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		1,585
31 to 60 Days Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		925	1,535
31 to 60 Days Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		660	997
31 to 60 Days Past Due [Member] | High CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			1,332
31 to 60 Days Past Due [Member] | High CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			951
31 to 60 Days Past Due [Member] | Average CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			140
31 to 60 Days Past Due [Member] | Average CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			46
31 to 60 Days Past Due [Member] | Low CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			63
31 to 60 Days Past Due [Member] | Low CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			0
61 to 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		2,319
61 to 90 Days Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		270	46
61 to 90 Days Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		2,049	212
61 to 90 Days Past Due [Member] | High CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			2
61 to 90 Days Past Due [Member] | High CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			105
61 to 90 Days Past Due [Member] | Average CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			44
61 to 90 Days Past Due [Member] | Average CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			107
61 to 90 Days Past Due [Member] | Low CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			0
61 to 90 Days Past Due [Member] | Low CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			0
Greater than 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		2,594
Greater than 90 Days Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		823	574
Greater than 90 Days Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due		$ 1,771	1,034
Greater than 90 Days Past Due [Member] | High CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			280
Greater than 90 Days Past Due [Member] | High CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			922
Greater than 90 Days Past Due [Member] | Average CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			142
Greater than 90 Days Past Due [Member] | Average CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			112
Greater than 90 Days Past Due [Member] | Low CQR [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			152
Greater than 90 Days Past Due [Member] | Low CQR [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total past due			$ 0

[1] Unguaranteed residual values of $12,644 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $364 thousand are excluded from amortized cost.

XML

PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Other current assets [Abstract]
Deposits & funds held in escrow	$ 339	$ 926
Prepaid assets	7,640	7,946
Other	254	384
Total other current assets	8,233	9,256
Property, equipment and other assets [Abstract]
Property and equipment, net	7,258	7,153
Deferred costs - non-current	12,568	10,957
Right-of-use assets	11,069	13,066
Other	3,419	1,420
Total	$ 34,314	$ 32,596
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent
Other current liabilities [Abstract]
Accrued expenses	$ 10,639	$ 10,024
Accrued income taxes payable	3,021	406
Contingent consideration - current	0	220
Short-term lease liability	4,698	4,815
Other	7,014	7,521
Total	$ 25,372	$ 22,986
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent
Other liabilities [Abstract]
Deferred revenue	$ 19,074	$ 16,693
Long-term lease liability	6,590	8,326
Other	7,278	2,708
Total	$ 32,942	$ 27,727
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent

XML

CREDIT FACILITY AND NOTES PAYABLE (Details) $ in Thousands			6 Months Ended
	Oct. 01, 2020 USD ($)	May 15, 2020 USD ($)	Sep. 30, 2020 USD ($) Component	Mar. 31, 2020 USD ($)
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility			$ 275,000
Recourse Notes Payable [Abstract]
Recourse notes payable-current			2,286	$ 37,256
Account Receivable Component [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility		$ 275,000	100,000
Recourse Note Payable [Member]
Recourse Notes Payable [Abstract]
Recourse notes payable-current			$ 2,300	$ 2,300
Weighted average interest rate of notes			2.55%	2.55%
Non-Recourse Note Payable [Member]
Recourse Notes Payable [Abstract]
Weighted average interest rate of notes			3.15%	3.84%
Non-recourse Notes Payable [Abstract]
Non-recourse notes payable			$ 38,100	$ 35,500
WFCDF [Member]
Credit Facility [Abstract]
Number of components under credit facility | Component			2
Guarantor obligations for credit facility, maximum			$ 10,500
Period of notice required to terminate credit facility at quarter end			45 days
Period of notice required to terminate credit facility at year end			90 days
WFCDF [Member] | Minimum [Member]
Credit Facility [Abstract]
Period of temporary increase of aggregate limit on credit facility			30 days
WFCDF [Member] | Maximum [Member]
Credit Facility [Abstract]
Aggregate period of temporary increase of aggregate limit on credit facility in a calendar year			150 days
WFCDF [Member] | Floor Plan Component [Member]
Credit Facility [Abstract]
Amount outstanding under credit facility			$ 219,000	127,400
WFCDF [Member] | Account Receivable Component [Member]
Credit Facility [Abstract]
Amount outstanding under credit facility			$ 0	$ 35,000
Maximum borrowing capacity under credit facility		$ 100,000
Basis spread on reference rate		2.00%
WFCDF [Member] | Account Receivable Component [Member] | LIBOR [Member]
Credit Facility [Abstract]
Basis spread on reference rate		0.75%
Debt instrument term of variable rate			1 month
Election under WFCDF [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility		$ 350,000
Election under WFCDF [Member] | Subsequent Event [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility	$ 350,000
Election under WFCDF [Member] | Minimum [Member] | Subsequent Event [Member]
Credit Facility [Abstract]
Period of temporary increase of aggregate limit on credit facility	30 days

XML

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share, Basic and Diluted [Abstract]
Net earnings attributable to common shareholders - basic and diluted	$ 19,846	$ 17,360	$ 20,098	$ 16,188	$ 37,206	$ 36,286
Basic and diluted common shares outstanding [Abstract]
Weighted average common shares outstanding - basic (in shares)	13,372		13,312		13,347	13,334
Effect of dilutive shares (in shares)	19		38		47	74
Weighted average shares common outstanding - diluted (in shares)	13,391		13,350		13,394	13,408
Earnings per common share - basic (in dollars per share)	$ 1.48		$ 1.51		$ 2.79	$ 2.72
Earnings per common share - diluted (in dollars per share)	$ 1.48		$ 1.51		$ 2.78	$ 2.71

XML

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	May 20, 2020	May 24, 2019
STOCKHOLDERS' EQUITY [Abstract]
Authorized number of shares under stock repurchase program (in shares)			500,000	500,000
Common stock repurchased during the period (in shares)	24,318	149,044
Common stock repurchased during the period	$ 1.8	$ 10.7
Shares repurchased to satisfy tax withholding obligation (in shares)	37,640	41,817
Value of shares repurchased to satisfy tax withholding obligation	$ 2.7	$ 3.0

XML

SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Additional Disclosures [Abstract]
Vested share-based awards withheld to satisfy income tax obligations (in shares)	37,640	41,817
Vested share-based awards withheld to satisfy income tax obligations	$ 2.7	$ 3.0
Restricted Stock [Member]
Number of Shares [Roll Forward]
Nonvested at beginning of period (in shares)	193,580
Granted (in shares)	99,182
Vested (in shares)	(110,155)
Forfeited (in shares)	0
Nonvested at end of period (in shares)	182,607
Weighted Average Grant-date Fair Value [Roll Forward]
Nonvested at beginning of period (in dollars per share)	$ 73.74
Granted (in dollars per share)	71.81
Vested (in dollars per share)	70.00
Forfeited (in dollars per share)	0
Nonvested at end of period (in dollars per share)	$ 74.95
2017 Director LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	9,309	8,132
2012 Employee LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	89,873	85,132
Additional Disclosures [Abstract]
Vested share-based awards withheld to satisfy income tax obligations (in shares)	37,640
Vested share-based awards withheld to satisfy income tax obligations	$ 2.7

XML

SHARE-BASED COMPENSATION, Compensation Expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Compensation Expense [Abstract]
Share-based compensation expense	$ 1,800,000	$ 2,100,000	$ 3,648,000	$ 4,054,000
401(k) Profit Sharing Plan [Abstract]
Contribution to profit sharing plan	700,000	$ 700,000	1,400,000	$ 1,400,000
Restricted Stock [Member]
Compensation Expense [Abstract]
Unrecognized compensation expense	$ 11,600		$ 11,600
Unrecognized compensation expense, period for recognition			33 months

XML

INCOME TAXES (Details) $ in Thousands	6 Months Ended
	Sep. 30, 2020 USD ($)
INCOME TAXES [Abstract]
Additions or reductions to gross unrecognized tax benefits	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended		6 Months Ended
	Aug. 31, 2020	Oct. 31, 2019	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Assets [Abstract]
Money market funds				$ 45,132		$ 45,132		$ 128
Liabilities [Abstract]
Contingent consideration								220
Payments of contingent consideration	$ 219	$ 9,600	$ 500
Adjustments to contingent consideration liabilities				0	$ 1,100	0	$ 1,500
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Money market funds				45,132		45,132		128
Liabilities [Abstract]
Contingent consideration								0
Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Money market funds				0		0		0
Liabilities [Abstract]
Contingent consideration								0
Significant Unobservable Inputs (Level 3) [Member]
Assets [Abstract]
Money market funds				$ 0		$ 0		0
Liabilities [Abstract]
Contingent consideration								$ 220

XML

BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands		1 Months Ended	6 Months Ended
	Aug. 23, 2019	Dec. 31, 2019	Sep. 30, 2020	Mar. 31, 2020
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Goodwill			$ 118,177	$ 118,097
ABS Technology [Member]
Business Combination [Abstract]
Cash portion of the acquisition	$ 13,800
Contingent consideration payable				$ 1,700
Repayment from acquiree		$ 200
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Accounts receivable	9,208
Other assets	743
Identified intangible assets	5,720
Accounts payable and other current liabilities	(6,715)
Performance obligation	(1,140)
Total identifiable net assets	7,816
Goodwill	7,461
Total purchase consideration	$ 15,277
ABS Technology [Member] | Customer Relationships [Member]
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Estimated useful lives			7 years

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SEGMENT REPORTING, Reportable Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) Segment	Sep. 30, 2019 USD ($)	Mar. 31, 2020 USD ($)
SEGMENT REPORTING [Abstract]
Number of business segments | Segment			2
Reportable Segment Information [Abstract]
Net sales	$ 433,081	$ 411,565	$ 788,112	$ 792,937
Cost of Sales [Abstract]
Cost of sales	334,119	308,534	590,593	597,267
Gross profit	98,962	103,031	197,519	195,670
Selling, general, and administrative	66,889	70,523	136,356	136,310
Depreciation and amortization	3,341	3,557	6,857	7,020
Interest and financing costs	247	576	824	1,204
Operating expenses	70,477	74,656	144,037	144,534
Operating income	28,485	28,375	53,482	51,136
Other income (expense)	184	(40)	282	(85)
Earnings before tax	28,669	28,335	53,764	51,051
Net Sales [Abstract]
Contracts with customers	413,385	395,996	748,332	760,466
Financing and other	19,696	15,569	39,780	32,471
Net sales	433,081	411,565	788,112	792,937
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	4,681	5,113	9,460	10,077
Purchases of property, equipment and operating lease equipment	990	3,370	3,267	4,888
Selected Financial Data - Balance Sheet [Abstract]
Total assets	1,038,711	914,266	1,038,711	914,266	$ 909,113
Product [Member]
Reportable Segment Information [Abstract]
Net sales	383,656	363,497	690,896	699,098
Cost of Sales [Abstract]
Cost of sales	302,963	278,863	529,597	538,926
Net Sales [Abstract]
Net sales	383,656	363,497	690,896	699,098
Service [Member]
Reportable Segment Information [Abstract]
Net sales	49,425	48,068	97,216	93,839
Cost of Sales [Abstract]
Cost of sales	31,156	29,671	60,996	58,341
Net Sales [Abstract]
Net sales	49,425	48,068	97,216	93,839
Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	419,359	397,718	760,583	766,253
Net Sales [Abstract]
Contracts with customers	412,357	394,585	746,344	758,266
Financing and other	7,002	3,133	14,239	7,987
Net sales	419,359	397,718	760,583	766,253
Operating Segments [Member] | Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	419,359	397,718	760,583	766,253
Cost of Sales [Abstract]
Cost of sales	332,162	306,146	586,545	592,870
Gross profit	87,197	91,572	174,038	173,383
Selling, general, and administrative	62,586	67,189	128,142	129,856
Depreciation and amortization	3,313	3,529	6,801	6,936
Interest and financing costs	1	0	266	0
Operating expenses	65,900	70,718	135,209	136,792
Operating income	21,297	20,854	38,829	36,591
Net Sales [Abstract]
Contracts with customers	412,357	394,585	746,344	758,266
Financing and other	7,002	3,133	14,239	7,987
Net sales	419,359	397,718	760,583	766,253
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	3,499	3,658	7,133	7,283
Purchases of property, equipment and operating lease equipment	990	1,426	3,101	2,675
Selected Financial Data - Balance Sheet [Abstract]
Total assets	812,633	690,648	812,633	690,648
Operating Segments [Member] | Technology Segment [Member] | Product [Member]
Reportable Segment Information [Abstract]
Net sales	369,934	349,650	663,367	672,414
Cost of Sales [Abstract]
Cost of sales	301,006	276,475	525,549	534,529
Net Sales [Abstract]
Net sales	369,934	349,650	663,367	672,414
Operating Segments [Member] | Technology Segment [Member] | Service [Member]
Reportable Segment Information [Abstract]
Net sales	49,425	48,068	97,216	93,839
Cost of Sales [Abstract]
Cost of sales	31,156	29,671	60,996	58,341
Net Sales [Abstract]
Net sales	49,425	48,068	97,216	93,839
Operating Segments [Member] | Financing Segment [Member]
Reportable Segment Information [Abstract]
Net sales	13,722	13,847	27,529	26,684
Cost of Sales [Abstract]
Cost of sales	1,957	2,388	4,048	4,397
Gross profit	11,765	11,459	23,481	22,287
Selling, general, and administrative	4,303	3,334	8,214	6,454
Depreciation and amortization	28	28	56	84
Interest and financing costs	246	576	558	1,204
Operating expenses	4,577	3,938	8,828	7,742
Operating income	7,188	7,521	14,653	14,545
Net Sales [Abstract]
Contracts with customers	1,028	1,411	1,988	2,200
Financing and other	12,694	12,436	25,541	24,484
Net sales	13,722	13,847	27,529	26,684
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	1,182	1,455	2,327	2,794
Purchases of property, equipment and operating lease equipment	0	1,944	166	2,213
Selected Financial Data - Balance Sheet [Abstract]
Total assets	226,078	223,618	226,078	223,618
Operating Segments [Member] | Financing Segment [Member] | Product [Member]
Reportable Segment Information [Abstract]
Net sales	13,722	13,847	27,529	26,684
Cost of Sales [Abstract]
Cost of sales	1,957	2,388	4,048	4,397
Net Sales [Abstract]
Net sales	13,722	13,847	27,529	26,684
Operating Segments [Member] | Financing Segment [Member] | Service [Member]
Reportable Segment Information [Abstract]
Net sales	0	0	0	0
Cost of Sales [Abstract]
Cost of sales	0	0	0	0
Net Sales [Abstract]
Net sales	$ 0	$ 0	$ 0	$ 0

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SEGMENT REPORTING, Technology Segment Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Abstract]
Net sales	$ 433,081	$ 411,565	$ 788,112	$ 792,937
Less: Revenue from financing and other	(19,696)	(15,569)	(39,780)	(32,471)
Revenue from contracts with customers	413,385	395,996	748,332	760,466
Technology Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	419,359	397,718	760,583	766,253
Less: Revenue from financing and other	(7,002)	(3,133)	(14,239)	(7,987)
Revenue from contracts with customers	412,357	394,585	746,344	758,266
Technology Segment [Member] | Technology [Member]
Disaggregation of Revenue [Abstract]
Net sales	76,321	97,502	146,288	173,682
Technology Segment [Member] | Telecom, Media & Entertainment [Member]
Disaggregation of Revenue [Abstract]
Net sales	96,927	71,044	153,579	133,510
Technology Segment [Member] | Financial Services [Member]
Disaggregation of Revenue [Abstract]
Net sales	46,732	44,605	94,153	92,847
Technology Segment [Member] | State and Local Government and Educational Institutions [Member]
Disaggregation of Revenue [Abstract]
Net sales	76,492	71,866	147,055	143,057
Technology Segment [Member] | Health Care [Member]
Disaggregation of Revenue [Abstract]
Net sales	59,252	59,818	105,788	115,926
Technology Segment [Member] | All others [Member]
Disaggregation of Revenue [Abstract]
Net sales	63,635	52,883	113,720	107,231
Technology Segment [Member] | Cisco Systems [Member]
Disaggregation of Revenue [Abstract]
Net sales	173,166	172,605	301,098	318,786
Technology Segment [Member] | NetApp [Member]
Disaggregation of Revenue [Abstract]
Net sales	9,914	9,771	25,335	23,198
Technology Segment [Member] | HP Inc. & HPE [Member]
Disaggregation of Revenue [Abstract]
Net sales	16,395	18,986	33,433	42,099
Technology Segment [Member] | Dell / EMC [Member]
Disaggregation of Revenue [Abstract]
Net sales	15,349	12,494	46,430	26,275
Technology Segment [Member] | Arista Networks [Member]
Disaggregation of Revenue [Abstract]
Net sales	13,443	26,766	20,263	47,716
Technology Segment [Member] | Juniper Networks [Member]
Disaggregation of Revenue [Abstract]
Net sales	24,716	24,370	38,295	31,424
Technology Segment [Member] | All others [Member]
Disaggregation of Revenue [Abstract]
Net sales	$ 166,376	$ 132,726	$ 295,729	$ 276,755