QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Accelerated filer ☐ |
|
Non-accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
Part I. Financial Information: |
||||
Item 1. |
Financial Statements |
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5 |
||||
6 |
||||
7 |
||||
8 |
||||
10 |
||||
11 |
||||
Item 2. |
24 |
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Item 3. |
38 |
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Item 4. |
39 |
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Part II. Other Information: |
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Item 1. |
39 |
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Item 1A. |
39 |
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Item 2. |
40 |
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Item 3. |
40 |
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Item 4. |
40 |
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Item 5. |
40 |
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Item 6. |
41 |
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42 |
• | the duration and ongoing impact of the novel coronavirus (“COVID-19”) pandemic, 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 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”), software as a service (“SaaS”) and platform as a service (“PaaS”); |
• | our dependency on continued innovations in hardware, software, and services offerings by our vendors and our ability to partner with them; |
• | availability of products from our vendors; |
• | significant and rapid inflation may cause price and wage increases, as well as increases in operating costs which may impact the arrangements that have pricing commitments over the term of the agreement. |
• | 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; |
• | 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 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; |
• | 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. |
Item 1. | Financial Statements |
June 30, 2021 |
March 31, 2021 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Accounts receivable—trade, net |
||||||||
Accounts receivable—other, net |
||||||||
Inventories |
||||||||
Financing receivables—net, current |
||||||||
Deferred costs |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Financing receivables and operating leases—net |
||||||||
Deferred tax asset—net |
||||||||
Property, equipment and other assets |
||||||||
Goodwill |
||||||||
Other intangible assets—net |
||||||||
TOTAL ASSETS |
$ |
$ |
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
LIABILITIES |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
$ |
||||||
Accounts payable—floor plan |
||||||||
Salaries and commissions payable |
||||||||
Deferred revenue |
||||||||
Recourse notes payable—current |
||||||||
Non-recourse notes payable—current |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Recourse notes payable - long-term |
||||||||
Non-recourse notes payable - long-term |
||||||||
Other liabilities |
||||||||
TOTAL LIABILITIES |
||||||||
COMMITMENTS AND CONTINGENCIES (Note 9) |
||||||||
STOCKHOLDERS' EQUITY |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Treasury stock, at cost, |
( |
) |
( |
) |
||||
Retained earnings |
||||||||
Accumulated other comprehensive income—foreign currency translation adjustment |
||||||||
Total Stockholders' Equity |
||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
$ |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Net sales |
||||||||
Product |
$ |
$ |
||||||
Services |
||||||||
Total |
||||||||
Cost of sales |
||||||||
Product |
||||||||
Services |
||||||||
Total |
||||||||
Gross profit |
||||||||
Selling, general, and administrative |
||||||||
Depreciation and amortization |
||||||||
Interest and financing costs |
||||||||
Operating expenses |
||||||||
Operating income |
||||||||
Other income |
||||||||
Earnings before tax |
||||||||
Provision for income taxes |
||||||||
Net earnings |
$ |
$ |
||||||
Net earnings per common share—basic |
$ |
$ |
||||||
Net earnings per common share—diluted |
$ |
$ |
||||||
Weighted average common shares outstanding—basic |
||||||||
Weighted average common shares outstanding—diluted |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
NET EARNINGS |
$ |
$ |
||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX: |
||||||||
Foreign currency translation adjustments |
||||||||
Other comprehensive income |
||||||||
TOTAL COMPREHENSIVE INCOME |
$ |
$ |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net earnings |
$ |
$ |
||||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
||||||||
Reserve for credit losses |
( |
) |
||||||
Share-based compensation expense |
||||||||
Deferred taxes |
||||||||
Payments from lessees directly to lenders—operating leases |
( |
) |
( |
) |
||||
Gain on disposal of property, equipment, and operaing lease equipment |
( |
) |
( |
) |
||||
Changes in: |
||||||||
Accounts receivable |
( |
) |
( |
) |
||||
Inventories-net |
( |
) |
( |
) |
||||
Financing receivables—net |
( |
) |
||||||
Deferred costs and other assets |
||||||||
Accounts payable-trade |
( |
) |
||||||
Salaries and commissions payable, deferred revenue, and other liabilities |
( |
) |
||||||
Net cash provided by (used in) operating activities |
( |
) |
||||||
Cash flows from investing activities: |
||||||||
Proceeds from sale of property, equipment, and operating lease equipment |
||||||||
Purchases of property, equipment and operating lease equipment |
( |
) |
( |
) |
||||
Net cash used in investing activities |
( |
) |
( |
) |
||||
Cash flows from financing activities: |
||||||||
Borrowings of non-recourse and recourse notes payable |
||||||||
Repayments of non-recourse and recourse notes payable |
( |
) |
( |
) |
||||
Repurchase of common stock |
( |
) |
( |
) |
||||
Net borrowings (repayments) on floor plan facility |
||||||||
Net cash provided by financing activities |
||||||||
Effect of exchange rate changes on cash |
( |
) |
||||||
Net increase (decrease) in cash and cash equivalents |
( |
) |
||||||
Cash and cash equivalents, beginning of period |
||||||||
Cash and cash equivalents, end of period |
$ |
$ |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for interest |
$ |
$ |
||||||
Cash paid for income taxes |
$ |
$ |
||||||
Cash paid for amounts included in the measurement of lease liabilities |
$ |
$ |
||||||
Schedule of non-cash investing and financing activities: |
||||||||
Proceeds from sale of property, equipment, and leased equipment |
$ |
$ |
||||||
Purchases of property, equipment, and operating lease equipment |
$ |
( |
) |
$ |
( |
) |
||
Borrowing of non-recourse and recourse notes payable |
$ |
$ |
||||||
Repayments of non-recourse and recourse notes payable |
$ |
( |
) |
$ |
( |
) |
||
Vesting of share-based compensation |
$ |
$ |
||||||
Repurchase of common stock |
$ |
( |
) |
$ |
||||
New operating lease assets obtained in exchange for lease obligations |
$ |
$ |
Three Months Ended June 30, 2021 |
||||||||||||||||||||||||||||
Common Stock |
Additional Paid-In |
Treasury |
Retained |
Accumulated Other Comprehensive |
||||||||||||||||||||||||
Shares |
Par Value |
Capital |
Stock |
Earnings |
Income |
Total |
||||||||||||||||||||||
Balance, March 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
||||||||||||||||||||
Issuance of restricted stock awards |
||||||||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||
Repurchase of common stock |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||
Net earnings |
- |
|||||||||||||||||||||||||||
Foreign currency translation adjustment |
- |
|||||||||||||||||||||||||||
Balance, June 30, 2021 |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
Three Months Ended June 30, 2020 |
||||||||||||||||||||||||||||
Common Stock |
Additional Paid-In |
Treasury |
Retained |
Accumulated Other Comprehensive |
||||||||||||||||||||||||
Shares |
Par Value |
Capital |
Stock |
Earnings |
Income |
Total |
||||||||||||||||||||||
Balance, March 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||||||||||||
Issuance of restricted stock awards |
||||||||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||
Repurchase of common stock |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||
Net earnings |
- |
|||||||||||||||||||||||||||
Foreign currency translation adjustment |
- |
|||||||||||||||||||||||||||
Balance, June 30, 2020 |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
1. | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | REVENUES |
June 30, 2021 |
March 31, 2021 |
|||||||
Current (included in deferred revenue) |
$ |
$ |
||||||
Non-current (included in other liabilities) |
$ |
$ |
$ |
||||
Total remaining performance obligations |
$ |
3. | FINANCING RECEIVABLES AND OPERATING LEASES |
Three months ended June 30, |
||||||||
2021 |
2020 |
|||||||
Net sales |
$ |
$ |
||||||
Cost of sales |
||||||||
Gross profit |
$ |
$ |
Three months ended June 30, |
||||||||
2021 |
2020 |
|||||||
Interest income on sales-type leases |
$ |
$ |
||||||
Lease income on operating leases |
$ |
$ |
June 30, 2021 |
Notes Receivable |
Lease Receivables |
Financing Receivables |
|||||||||
Gross receivables |
$ |
$ |
$ |
|||||||||
Unguaranteed residual value (1) |
||||||||||||
Initial direct costs, net of amortization |
||||||||||||
Unearned income |
( |
) |
( |
) |
||||||||
Allowance for credit losses (2) |
( |
) |
( |
) |
( |
) |
||||||
Total, net |
$ |
$ |
$ |
|||||||||
Reported as: |
||||||||||||
Current |
$ |
$ |
$ |
|||||||||
Long-term |
||||||||||||
Total, net |
$ |
$ |
$ |
(1) |
(2) |
March 31, 2021 |
Notes Receivable |
Lease Receivables |
Financing Receivables |
|||||||||
Gross receivables |
$ |
$ |
$ |
|||||||||
Unguaranteed residual value (1) |
||||||||||||
Initial direct costs, net of amortization |
||||||||||||
Unearned income |
( |
) |
( |
) |
||||||||
Allowance for credit losses (2) |
( |
) |
( |
) |
( |
) |
||||||
Total, net |
$ |
$ |
$ |
|||||||||
Reported as: |
||||||||||||
Current |
$ |
$ |
$ |
|||||||||
Long-term |
||||||||||||
Total, net |
$ |
$ |
$ |
(1) |
(2) |
June 30, 2021 |
March 31, 2021 |
|||||||
Cost of equipment under operating leases |
$ |
$ |
||||||
Accumulated depreciation |
( |
) |
( |
) |
||||
Investment in operating lease equipment—net (1) |
$ |
$ |
(1) |
4. | LESSEE ACCOUNTING |
5. | GOODWILL AND OTHER INTANGIBLE ASSETS |
Three months ended June 30, 2021 |
||||||||||||
Goodwill |
Accumulated Impairment Loss |
Net Carrying Amount |
||||||||||
Beginning balance |
$ |
$ |
( |
) |
$ |
|||||||
Foreign currency translations |
- |
|||||||||||
Ending balance |
$ |
$ |
( |
) |
$ |
June 30, 2021 |
March 31, 2021 |
|||||||||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
|||||||||||||||||||
Customer relationships & other intangibles |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||
Capitalized software development |
( |
) |
( |
) |
||||||||||||||||||||
Total |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
6. | ALLOWANCE FOR CREDIT LOSSES |
Accounts Receivable |
Notes Receivable |
Lease Receivables |
Total |
|||||||||||||
Balance April 1, 2021 |
$ |
$ |
$ |
$ |
||||||||||||
Provision for credit losses |
( |
) |
( |
) |
( |
) |
||||||||||
Write-offs and other |
( |
) |
( |
) |
||||||||||||
Balance June 30, 2021 |
$ |
$ |
$ |
$ |
Accounts Receivable |
Notes Receivable |
Lease Receivables |
Total |
|||||||||||||
Balance April 1, 2020 |
$ |
$ |
$ |
$ |
||||||||||||
Provision for credit losses |
||||||||||||||||
Write-offs and other |
||||||||||||||||
Balance June 30, 2020 |
$ |
$ |
$ |
$ |
Amortized cost basis by origination year ending March 31, |
||||||||||||||||||||||||||||||||||||
2022 |
2021 |
2020 |
2019 |
2018 |
2017 and prior |
Total |
Transfers (2) |
Net credit exposure |
||||||||||||||||||||||||||||
Notes receivable: |
||||||||||||||||||||||||||||||||||||
High CQR |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||
Average CQR |
( |
) |
||||||||||||||||||||||||||||||||||
Low CQR |
||||||||||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||
Lease receivables: |
||||||||||||||||||||||||||||||||||||
High CQR |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||
Average CQR |
( |
) |
||||||||||||||||||||||||||||||||||
Low CQR |
||||||||||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||||||
Total amortized cost (1) |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
(1) |
(2) |
• |
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 |
• |
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 |
• |
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 |
Amortized cost basis by origination year ending March 31, |
||||||||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2018 |
2017 |
Total |
Transfers (2) |
Net credit exposure |
|||||||||||||||||||||||||
Notes receivable: |
||||||||||||||||||||||||||||||||
High CQR |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Average CQR |
( |
) |
||||||||||||||||||||||||||||||
Low CQR |
||||||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Lease receivables: |
||||||||||||||||||||||||||||||||
High CQR |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||||
Average CQR |
( |
) |
||||||||||||||||||||||||||||||
Low CQR |
||||||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Total amortized cost (1) |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
(1) |
(2) |
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 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Lease receivables |
||||||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
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 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Lease receivables |
||||||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
7. | PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES |
June 30, 2021 |
March 31, 2021 |
|||||||
Other current assets: |
||||||||
Deposits & funds held in escrow |
$ |
$ |
||||||
Prepaid assets |
||||||||
Other |
||||||||
Total |
$ |
$ |
||||||
Property and equipment, net |
$ |
$ |
||||||
Deferred costs - non-current |
||||||||
Right-of-use assets |
||||||||
Other |
||||||||
Total |
$ |
$ |
||||||
: |
||||||||
Accrued expenses |
$ |
$ |
||||||
Accrued income taxes payable |
||||||||
Short-term lease liability |
||||||||
Other |
||||||||
Total |
$ |
$ |
||||||
: |
||||||||
Deferred revenue - non-current |
$ |
$ |
||||||
Long-term lease liability |
||||||||
Other |
||||||||
Total |
$ |
$ |
8. | CREDIT FACILITY AND NOTES PAYABLE |
9. | COMMITMENTS AND CONTINGENCIES |
10. | EARNINGS PER SHARE |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Net earnings attributable to common shareholders - basic and diluted |
$ |
$ |
||||||
Basic and diluted common shares outstanding: |
||||||||
Weighted average common shares outstanding — basic |
||||||||
Effect of dilutive shares |
||||||||
Weighted average shares common outstanding — diluted |
||||||||
Earnings per common share - basic |
$ |
$ |
||||||
Earnings per common share - diluted |
$ |
$ |
11. | STOCKHOLDERS’ EQUITY |
12. | SHARE-BASED COMPENSATION |
Number of Shares |
Weighted Average Grant-date Fair Value |
|||||||
Nonvested April 1, 2021 |
$ |
|||||||
Granted |
$ |
|||||||
Vested |
( |
) |
$ |
|||||
Nonvested June 30, 2021 |
$ |
13. | INCOME TAXES |
14. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
Fair Value Measurement Using |
||||||||||||||||
Recorded Amount |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
June 30, 2021 |
||||||||||||||||
Assets: |
||||||||||||||||
Money market funds |
$ |
$ |
$ |
$ |
||||||||||||
March 31, 2021 |
||||||||||||||||
Assets: |
||||||||||||||||
Money market funds |
$ |
$ |
$ |
$ |
15. | BUSINESS COMBINATIONS |
Acquisition Date Amount |
||||
Accounts receivable |
$ |
|||
Other assets |
||||
Identified intangible assets |
||||
Accounts payable and other current liabilities |
( |
) |
||
Performance obligations |
( |
) |
||
Total identifiable net assets |
||||
Goodwill |
||||
Total purchase consideration |
$ |
16. | SEGMENT REPORTING |
Three Months Ended |
||||||||||||||||||||||||
June 30, 2021 |
June 30, 2020 |
|||||||||||||||||||||||
Technology |
Financing |
Total |
Technology |
Financing |
Total |
|||||||||||||||||||
Sales |
||||||||||||||||||||||||
Product |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Service |
||||||||||||||||||||||||
Net sales |
||||||||||||||||||||||||
Cost of Sales |
||||||||||||||||||||||||
Product |
||||||||||||||||||||||||
Service |
||||||||||||||||||||||||
Total cost of sales |
||||||||||||||||||||||||
Gross Profit |
||||||||||||||||||||||||
Selling, general, and administrative |
||||||||||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||||||
Interest and financing costs |
||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||
Operating income |
||||||||||||||||||||||||
Other income |
||||||||||||||||||||||||
Earnings before tax |
$ |
$ |
||||||||||||||||||||||
Net Sales |
||||||||||||||||||||||||
Contracts with customers |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Financing and other |
||||||||||||||||||||||||
Net Sales |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Selected Financial Data - Statement of Cash Flow |
||||||||||||||||||||||||
Depreciation and amortization |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Purchases of property, equipment and operating lease equipment |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Selected Financial Data - Balance Sheet |
||||||||||||||||||||||||
Total assets |
$ |
$ |
$ |
$ |
$ |
$ |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Customer end market: |
||||||||
Telecom, Media & Entertainment |
$ |
$ |
||||||
Technology |
||||||||
State and local government and educational institutions |
||||||||
Healthcare |
||||||||
Financial Services |
||||||||
All others |
||||||||
Net sales |
||||||||
Less: Revenue from financing and other |
( |
) |
( |
) |
||||
Revenue from contracts with customers |
$ |
$ |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Vendor |
||||||||
Cisco Systems |
$ |
$ |
||||||
Dell / EMC |
||||||||
Juniper Networks |
||||||||
HP Inc. & HPE |
||||||||
Arista Networks |
||||||||
NetApp |
||||||||
All others |
||||||||
Net sales |
||||||||
Less: Revenue from financing and other |
( |
) |
( |
) |
||||
Revenue from contracts with customers |
$ |
$ |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended June 30, |
||||||||
Consolidated |
2021 |
2020 |
||||||
Net sales |
$ |
416,649 |
$ |
355,031 |
||||
Gross profit |
$ |
105,512 |
$ |
98,557 |
||||
Gross margin |
25.3 |
% |
27.8 |
% |
||||
Operating income margin |
7.8 |
% |
7.0 |
% |
||||
Net earnings |
$ |
23,518 |
$ |
17,360 |
||||
Net earnings margin |
5.6 |
% |
4.9 |
% |
||||
Net earnings per common share - diluted |
$ |
1.75 |
$ |
1.30 |
||||
Non-GAAP: Net earnings (1) |
$ |
26,353 |
$ |
20,207 |
||||
Non-GAAP: Net earnings per common share - diluted (1) |
$ |
1.96 |
$ |
1.51 |
||||
Adjusted EBITDA (2) |
$ |
38,272 |
$ |
30,714 |
||||
Adjusted EBITDA margin |
9.2 |
% |
8.7 |
% |
||||
Purchases of property and equipment used internally |
$ |
1,307 |
$ |
2,106 |
||||
Purchases of equipment under operating leases |
5,687 |
171 |
||||||
Total capital expenditures |
$ |
6,994 |
$ |
2,277 |
||||
Technology Segment |
||||||||
Net sales |
$ |
400,358 |
$ |
341,224 |
||||
Adjusted gross billings (3) |
$ |
633,007 |
$ |
546,394 |
||||
Gross profit |
$ |
95,433 |
$ |
86,841 |
||||
Gross margin |
23.8 |
% |
25.4 |
% |
||||
Operating income |
$ |
25,223 |
$ |
17,532 |
||||
Adjusted EBITDA (2) |
$ |
30,958 |
$ |
23,161 |
||||
Financing Segment |
||||||||
Net sales |
$ |
16,291 |
$ |
13,807 |
||||
Gross profit |
$ |
10,079 |
$ |
11,716 |
||||
Operating Income |
$ |
7,229 |
$ |
7,465 |
||||
Adjusted EBITDA (2) |
$ |
7,314 |
$ |
7,553 |
(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. |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
GAAP: Earnings before tax |
$ |
32,575 |
$ |
25,095 |
||||
Share based compensation |
1,735 |
1,907 |
||||||
Acquisition and integration expense |
- |
29 |
||||||
Acquisition related amortization expense |
2,696 |
2,228 |
||||||
Other income |
(123 |
) |
(98 |
) |
||||
Non-GAAP: Earnings before provision for income taxes |
36,883 |
29,161 |
||||||
GAAP: Provision for income taxes |
9,057 |
7,735 |
||||||
Share based compensation |
496 |
587 |
||||||
Acquisition and integration expense |
- |
9 |
||||||
Acquisition related amortization expense |
757 |
667 |
||||||
Other income |
(35 |
) |
(30 |
) |
||||
Tax benefit (expense) on restricted stock |
255 |
(14 |
) |
|||||
Non-GAAP: Provision for income taxes |
10,530 |
8,954 |
||||||
Non-GAAP: Net earnings |
$ |
26,353 |
$ |
20,207 |
||||
GAAP: Net earnings per common share - diluted |
$ |
1.75 |
$ |
1.30 |
||||
Non-GAAP: Net earnings per common share - diluted |
$ |
1.96 |
$ |
1.51 |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
GAAP: Net earnings per common share - diluted |
$ |
1.75 |
$ |
1.30 |
||||
Share based compensation |
0.09 |
0.10 |
||||||
Acquisition related amortization expense |
0.15 |
0.12 |
||||||
Other income |
(0.01 |
) |
(0.01 |
) |
||||
Tax benefit (expense) on restricted stock |
(0.02 |
) |
- |
|||||
Total non-GAAP adjustments - net of tax |
0.21 |
0.21 |
||||||
Non-GAAP: Net earnings per common share - diluted |
$ |
1.96 |
$ |
1.51 |
(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. 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. The presentation of Adjusted EBITDA has been changed from prior period presentations to include adjustments for expenses related to acquisitions such as legal, accounting, tax, and adjustments to the fair value of contingent purchase price consideration as well as stock compensation. |
Three Months Ended June 30, |
||||||||
Consolidated |
2021 |
2020 |
||||||
Net earnings |
$ |
23,518 |
$ |
17,360 |
||||
Provision for income taxes |
9,057 |
7,735 |
||||||
Share based compensation |
1,735 |
1,907 |
||||||
Interest and financing costs |
159 |
265 |
||||||
Acquisition and integration expense |
- |
29 |
||||||
Depreciation and amortization |
3,926 |
3,516 |
||||||
Other income |
(123 |
) |
(98 |
) |
||||
Adjusted EBITDA |
$ |
38,272 |
$ |
30,714 |
||||
Technology Segment |
||||||||
Operating income |
$ |
25,223 |
$ |
17,532 |
||||
Depreciation and amortization |
3,898 |
3,488 |
||||||
Share based compensation |
1,678 |
1,847 |
||||||
Interest and financing costs |
159 |
265 |
||||||
Acquisition and integration expense |
- |
29 |
||||||
Adjusted EBITDA |
$ |
30,958 |
$ |
23,161 |
||||
Financing Segment |
||||||||
Operating income |
$ |
7,229 |
$ |
7,465 |
||||
Depreciation and amortization |
28 |
28 |
||||||
Share based compensation |
57 |
60 |
||||||
Adjusted EBITDA |
$ |
7,314 |
$ |
7,553 |
(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, 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. |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Technology segment net sales |
$ |
400,358 |
$ |
341,224 |
||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/Saas licenses, and services |
232,649 |
205,170 |
||||||
Adjusted gross billings |
$ |
633,007 |
$ |
546,394 |
• | 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 the sale of off-lease (used) equipment. |
Three Months Ended June 30, |
||||||||||||||||
2021 |
2020 |
Change |
||||||||||||||
Net sales |
||||||||||||||||
Product |
$ |
344,766 |
$ |
293,433 |
$ |
51,333 |
17.5 |
% |
||||||||
Services |
55,592 |
47,791 |
7,801 |
16.3 |
% |
|||||||||||
Total |
400,358 |
341,224 |
59,134 |
17.3 |
% |
|||||||||||
Cost of sales |
||||||||||||||||
Product |
271,015 |
224,543 |
46,472 |
20.7 |
% |
|||||||||||
Services |
33,910 |
29,840 |
4,070 |
13.6 |
% |
|||||||||||
Total |
304,925 |
254,383 |
50,542 |
19.9 |
% |
|||||||||||
Gross profit |
95,433 |
86,841 |
8,592 |
9.9 |
% |
|||||||||||
Selling, general, and administrative |
66,153 |
65,556 |
597 |
0.9 |
% |
|||||||||||
Depreciation and amortization |
3,898 |
3,488 |
410 |
11.8 |
% |
|||||||||||
Interest and financing costs |
159 |
265 |
(106 |
) |
(40.0 |
%) |
||||||||||
Operating expenses |
70,210 |
69,309 |
901 |
1.3 |
% |
|||||||||||
Operating income |
$ |
25,223 |
$ |
17,532 |
$ |
7,691 |
43.9 |
% |
||||||||
Adjusted gross billings |
$ |
633,007 |
$ |
546,394 |
$ |
86,613 |
15.9 |
% |
||||||||
Adjusted EBITDA |
$ |
30,958 |
$ |
23,161 |
$ |
7,797 |
33.7 |
% |
Twelve Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
Revenue by customer end market: |
||||||||||||
Telecom, Media & Entertainment |
27 |
% |
19 |
% |
8 |
% |
||||||
Technology |
16 |
% |
21 |
% |
(5 |
%) |
||||||
SLED |
15 |
% |
16 |
% |
(1 |
%) |
||||||
Healthcare |
13 |
% |
15 |
% |
(2 |
%) |
||||||
Financial Services |
12 |
% |
13 |
% |
(1 |
%) |
||||||
All others |
17 |
% |
16 |
% |
1 |
% |
||||||
Total |
100 |
% |
100 |
% |
Twelve Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
Revenue by vendor: |
||||||||||||
Cisco Systems |
37 |
% |
39 |
% |
(2 |
%) |
||||||
Dell / EMC |
7 |
% |
7 |
% |
0 |
% |
||||||
Juniper Networks |
7 |
% |
5 |
% |
2 |
% |
||||||
HP Inc. & HPE |
4 |
% |
4 |
% |
0 |
% |
||||||
Arista Networks |
4 |
% |
4 |
% |
0 |
% |
||||||
NetApp |
3 |
% |
4 |
% |
(1 |
%) |
||||||
All others |
38 |
% |
37 |
% |
1 |
% |
||||||
Total |
100 |
% |
100 |
% |
Three Months Ended June 30, |
||||||||||||||||
2021 |
2020 |
Change |
||||||||||||||
Net sales |
$ |
16,291 |
$ |
13,807 |
$ |
2,484 |
18.0 |
% |
||||||||
Cost of sales |
6,212 |
2,091 |
4,121 |
197.1 |
% |
|||||||||||
Gross profit |
10,079 |
11,716 |
(1,637 |
) |
(14.0 |
%) |
||||||||||
Selling, general, and administrative |
2,622 |
3,911 |
(1,289 |
) |
(33.0 |
%) |
||||||||||
Depreciation and amortization |
28 |
28 |
- |
0.0 |
% |
|||||||||||
Interest and financing costs |
200 |
312 |
(112 |
) |
(35.9 |
%) |
||||||||||
Operating expenses |
2,850 |
4,251 |
(1,401 |
) |
(33.0 |
%) |
||||||||||
Operating income |
$ |
7,229 |
$ |
7,465 |
$ |
(236 |
) |
(3.2 |
%) |
|||||||
Adjusted EBITDA |
$ |
7,314 |
$ |
7,553 |
$ |
(239 |
) |
(3.2 |
%) |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Net cash provided by (used in) operating activities |
$ |
(65,136 |
) |
$ |
6,394 |
|||
Net cash used in investing activities |
(6,151 |
) |
(2,159 |
) |
||||
Net cash provided by (used in) financing activities |
35,494 |
54,040 |
||||||
Effect of exchange rate changes on cash |
71 |
(124 |
) |
|||||
Net increase in cash and cash equivalents |
$ |
(35,722 |
) |
$ |
58,151 |
Three Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Technology segment |
$ |
(65,980 |
) |
$ |
11,191 |
|||
Financing segment |
844 |
(4,797 |
) |
|||||
Net cash provided by (used in) operating activities |
$ |
(65,136 |
) |
$ |
6,394 |
As of June 30, |
||||||||
2021 |
2020 |
|||||||
(DSO) Days sales outstanding (1) |
61 |
61 |
||||||
(DIO) Days inventory outstanding (2) |
13 |
14 |
||||||
(DPO) Days payable outstanding (3) |
(42 |
) |
(45 |
) |
||||
Cash conversion cycle |
32 |
30 |
(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. |
Maximum Credit Limit at June 30, 2021 |
Balance as of June 30, 2021 |
Maximum Credit Limit at March 31, 2021 |
Balance as of March 31, 2021 |
|||||||||||
$ |
275,000 |
$ |
139,574 |
$ |
275,000 |
$ |
98,653 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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, 2021 through April 30, 2021 |
- |
$ |
- |
- |
440,899 |
(2 |
) |
|||||||||||||
May 1, 2021 through May 27, 2021 |
999 |
$ |
100.80 |
- |
440,899 |
(3 |
) |
|||||||||||||
May 28, 2021 through May 31, 2021 |
- |
$ |
- |
- |
500,000 |
(4 |
) |
|||||||||||||
June 1, 2021 through June 30, 2021 |
44,345 |
$ |
90.42 |
17,629 |
482,371 |
(5 |
) |
(1) | All shares acquired were in open-market purchases, except for 27,715 shares, out of which 999 were repurchased in May 2021 and 26,716 in June 2021 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, 2021, had purchase limitations on the number of shares of up to 500,000 shares. As of April 30, 2021, the remaining authorized shares to be purchased were 440,899. |
(3) | As of May 27, 2021, the authorization under the then-existing share repurchase plan expired. |
(4) | On March 18, 2021, the board of directors authorized the company to repurchase up to 500,000 shares of our outstanding common stock commencing on May 28, 2021, and continuing to May 27, 2022. As of May 31, 2021, the remaining authorized shares to be purchased were 500,000. |
(5) | The share purchase authorization in place for the month ended June 30, 2021, had purchase limitations on the number of shares of up to 500,000 shares. As of June 30, 2021, the remaining authorized shares to be purchased were 482,371. |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit Number |
Exhibit Description |
|
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). |
||
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). |
||
Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a). |
||
Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a). |
||
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). |
ePlus inc. |
||
Date: August 4, 2021 |
/s/ MARK P. MARRON |
|
By: Mark P. Marron |
||
Chief Executive Officer and President |
||
(Principal Executive Officer) |
||
Date: August 4, 2021 |
/s/ ELAINE D. MARION |
|
By: Elaine D. Marion |
||
Chief Financial Officer |
||
(Principal Financial Officer) |
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.
|
/s/ MARK P. MARRON
|
|
Mark P. Marron
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
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.
|
/s/ ELAINE D. MARION
|
|
Elaine D. Marion
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
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.
|
/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)
|
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands |
Jun. 30, 2021 |
Mar. 31, 2021 |
---|---|---|
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) | 13,536 | 13,503 |
Treasury stock, shares (in shares) | 1,038 | 993 |
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
NET EARNINGS | $ 23,518 | $ 17,360 |
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||
Foreign currency translation adjustments | 66 | 37 |
Other comprehensive income | 66 | 37 |
TOTAL COMPREHENSIVE INCOME | $ 23,584 | $ 17,397 |
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, 2020 | $ 144 | $ 145,197 | $ (68,424) | $ 410,219 | $ (991) | $ 486,145 |
Balance (in shares) at Mar. 31, 2020 | 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, 2021 | $ 145 | 152,366 | (75,372) | 484,616 | 655 | $ 562,410 |
Balance (in shares) at Mar. 31, 2021 | 13,503 | 13,503 | ||||
Issuance of restricted stock awards | $ 1 | 0 | 0 | 0 | 0 | $ 1 |
Issuance of restricted stock awards (in shares) | 78 | |||||
Share-based compensation | $ 0 | 1,735 | 0 | 0 | 0 | 1,735 |
Share-based compensation (in shares) | 0 | |||||
Repurchase of common stock | $ 0 | 0 | $ (4,111) | 0 | 0 | (4,111) |
Repurchase of common stock (in shares) | (45) | |||||
Net earnings | 0 | 0 | $ 0 | 23,518 | 0 | 23,518 |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 66 | 66 |
Balance at Jun. 30, 2021 | $ 146 | $ 154,101 | $ (79,483) | $ 508,134 | $ 721 | $ 583,619 |
Balance (in shares) at Jun. 30, 2021 | 13,536 | 13,536 |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021 | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
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 that 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 three months ended June 30, 2021, and 2020, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the three months ended June 30, 2021, and 2020 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2022, 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, 2021 (“2021 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 42% of our technology segment’s net sales for the three months ended June 30, 2021, and 37% for the three months ended June 30, 2020.
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, 2021.
|
REVENUES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES |
CONTRACT BALANCES
Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $49.6 million and $54.6 million of receivables from contracts with customers included within financing receivables as of June 30, 2021, and March 31, 2021, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):
Revenue recognized from the beginning contract liability balance was $21.5 million and $15.6 million for the three months ended June 30, 2021, and 2020, 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).
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.
|
FINANCING RECEIVABLES AND OPERATING LEASES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FINANCING RECEIVABLES AND OPERATING LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING RECEIVABLES AND OPERATING LEASES |
Our financing receivables and operating leases consist primarily of leases of IT and communication equipment and notes receivable from financing customer purchases of third-party software, maintenance, and services. Our leases often include elections for the lessee to purchase the underlying asset at the end of the lease term. Occasionally, our leases provide the lessee a bargain purchase option.
The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three months ended June 30, 2021, and 2020 (in thousands):
The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three months ended June 30, 2021, and 2020 (in thousands):
FINANCING RECEIVABLES—NET
The following tables provide a disaggregation of our financing receivables – net (in thousands):
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):
TRANSFERS OF FINANCIAL ASSETS
We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for as sales or secured borrowings.
For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of June 30, 2021, and March 31, 2021, we had financing receivables of $12.4 million and $60.5 million, respectively, and operating leases of $5.7 million and $3.3 million, respectively, which were collateral for non-recourse notes payable. See Note 8, "Credit Facility and Notes Payable."
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 June 30, 2021, and 2020, we recognized net gains of $3.2 million and $2.5 million, respectively, and total proceeds from these sales were $75.3 million and $73.2 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 June 30, 2021, and March 31, 2021, we had deferred revenue of $0.3 million for servicing obligations.
In a limited number of transfers accounted for as sales, we indemnified the assignee if the lessee elects to early terminate the lease. As of June 30, 2021, the total potential payments that could result from these indemnities is immaterial.
|
LESSEE ACCOUNTING |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021 | |||
LESSEE ACCOUNTING [Abstract] | |||
LESSEE ACCOUNTING |
We lease office space for periods up to six 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 $1.3 million and $1.6 million for the three months ending June 30, 2021, and June 30, 2020, respectively, as part of selling, general, and administrative expenses.
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GOODWILL AND OTHER INTANGIBLE ASSETS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS |
GOODWILL
The following table summarizes the changes in the carrying amount of goodwill for the three months ended June 30, 2021 (in thousands):
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 June 30, 2021, relates to our technology segment, which we also determined to be one reporting unit. The change in our goodwill balance during the three months ended June 30, 2021, is due solely to foreign currency translation.
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, 2020, 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.
OTHER INTANGIBLE ASSETS
Our other intangible assets consist of the following on June 30, 2021, and March 31, 2021 (in thousands):
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 customer relationships and other intangible assets was $3.0 million and $2.5 million for the three months ended June 30, 2021, and June 30, 2020, respectively.
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ALLOWANCE FOR CREDIT LOSSES |
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ALLOWANCE FOR CREDIT LOSSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES |
The following table provides the activity in our allowance for credit losses for the three months ended June 30, 2021, and 2020 (in thousands):
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of June 30, 2021 (in thousands):
We evaluate our customers using an internally assigned credit quality rating (“CQR”):
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2021 (in thousands):
The following table provides an aging analysis of our financing receivables as of June 30, 2021 (in thousands):
The following table provides an aging analysis of our financing receivables as of March 31, 2021 (in thousands):
Our financial assets on nonaccrual status were not significant as of June 30, 2021, and March 31, 2021.
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PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES |
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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):
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 |
3 Months Ended | ||
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Jun. 30, 2021 | |||
CREDIT FACILITY AND NOTES PAYABLE [Abstract] | |||
CREDIT FACILITY AND NOTES PAYABLE |
CREDIT FACILITY
Within our technology segment, ePlus Technology, inc. and certain of its subsidiaries finance their operations, in addition to funds generated from operations, 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.
The WFCDF credit facility has an aggregate limit for the two components, except during a temporary uplift, of $275 million. We may elect to temporarily increase the aggregate limit to $350 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. Additionally, the WFCDF credit facility has a limit on the accounts receivable component of $100 million. WFCDF charges us an interest rate equal to two percent (2.00%) plus the greater of one month LIBOR or seventy-five hundredths of one percent (0.75%).
As of June 30, 2021, the limit of the two components of the credit facility was $275 million. On July 2, 2021, we elected to temporarily increase the aggregate limit to $350 million.
Our borrowing availability under the credit facility varies based upon the value of the receivables and inventory of ePlus Technology, inc., and certain of its subsidiaries. We had outstanding balances of $139.6 million and $98.7 million under the floor plan component as of June 30, 2021, and March 31, 2021, respectively. This component is presented as part of as accounts payable – floorplan. We had no outstanding balance under the accounts receivable component as of June 30, 2021, and as of March 31, 2021. This component is presented as part of recourse notes payable – current. The fair value of the outstanding balances under the WFCDF credit facility were approximately equal to their carrying value as of June 30, 2021, and March 31, 2021.
The WFCDF credit facility is secured by the assets of ePlus Technology, inc. and certain of its subsidiaries. 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 June 30, 2021, and March 31, 2021, 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’ written notice.
The loss of the WFCDF credit facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology segment and as an operational function of our accounts payable process.
RECOURSE NOTES PAYABLE
Recourse notes payable consist of borrowings that, in the event of default, the lender has recourse against us. We had $17.0 million and $18.1 million in recourse borrowings as of June 30, 2021, and March 31, 2021, respectively, that is resulting from one installment payment arrangement. Our payments under this installment agreement are due quarterly in amounts that are correlated to the payments due to us from a customer under a related notes receivable. We discounted our payments to calculate our payable balance using an interest rate of 3.50% as of both June 30, 2021, and March 31, 2021.
NON-RECOURSE NOTES PAYABLE
Non-recourse notes payable consists of borrowings that, in the event of a default by a customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us. As of June 30, 2021, and March 31, 2021, we had $15.3 million and $56.1 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 3.66% and 3.35%, as of June 30, 2021, and March 31, 2021, respectively.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended | ||
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Jun. 30, 2021 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
COMMITMENTS AND CONTINGENCIES |
LEGAL PROCEEDINGS
We are subject to various legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business and have not been fully resolved. The ultimate outcome of any litigation is uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable, we accrue our best estimate for the ultimate resolution of the matter. If one or more legal matters are resolved against us in a reporting period for amounts above management’s expectations, our financial condition and operating results for that period could be adversely affected. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against the us in the future, and these matters could relate to prior, current or future transactions or events.
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EARNINGS PER SHARE |
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EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during each period.
The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three months ended June 30, 2021, and 2020, respectively (in thousands, except per share data).
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STOCKHOLDERS' EQUITY |
3 Months Ended | ||
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Jun. 30, 2021 | |||
STOCKHOLDERS' EQUITY [Abstract] | |||
STOCKHOLDERS' EQUITY |
SHARE REPURCHASE PLAN
On March 18, 2021, our board of directors authorized the repurchase of up to 500,000 shares of our outstanding common stock over a 12-month period beginning May 28, 2021, and ending on May 27, 2022. 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 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 three months ended June 30, 2021, we purchased 17,629 shares of our outstanding common stock at a value of $1.6 million under the share repurchase plan; we also purchased 27,715 shares of common stock at a value of $2.6 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.
During the three months ended June 30, 2020, no shares of our outstanding common stock were purchased under the share repurchase plan; we 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.
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SHARE-BASED COMPENSATION |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION |
SHARE-BASED PLANS
As of June 30, 2021, 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 three months ended June 30, 2021, we granted 414 shares under the 2017 Director LTIP, and 77,861 restricted shares under the 2012 Employee LTIP. For the three months ended June 30, 2020, we granted 716 shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. A summary of the grants is as follows:
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 three months ended June 30, 2021, we withheld 27,715 shares of common stock at a value of $2.6 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 June 30, 2021, and 2020, we recognized $1.7 million and $1.9 million of total share-based compensation expense, respectively. Unrecognized compensation expense related to non-vested restricted stock was $13.7 million as of June 30, 2021, which will be fully recognized over the next 36 months.
We also provide our employees with a contributory 401(k) profit sharing plan, to which we may contribute from time to time at our sole discretion. Employer contributions to the plan are always fully vested. For the three months ended June 30, 2021, and 2020, our estimated contribution expense for the plan was $0.8 million and $0.7 million, respectively.
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INCOME TAXES |
3 Months Ended | ||
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Jun. 30, 2021 | |||
INCOME TAXES [Abstract] | |||
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 June 30, 2021, and June 30, 2020. We had no additions or reductions to our gross unrecognized tax benefits during the three months ended June 30, 2021. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 June 30, 2021, and March 31, 2021 (in thousands):
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BUSINESS COMBINATIONS |
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BUSINESS COMBINATIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATIONS |
SYSTEMS MANAGEMENT PLANNING (SMP)
On December 31, 2020, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of SMP, an established provider of technology solutions and services in upstate New York and the Northeast. The acquisition enhances ePlus’ footprint across the region, broadens our technology solution offerings especially in the areas of collaboration and supporting virtual employees, and adds to ePlus’ set of commercial, enterprise and state, local, and education customers.
Our sum of consideration transferred was $27.0 million consisting of $29.0 million paid in cash at closing less $2.0 million that was paid back to us in our quarter ended March 31, 2021, related to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):
The identified intangible assets of $14.3 million consists of customer relationships with an estimated useful life of seven years. The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables.
We recognized goodwill related to this transaction of $8.3 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, 2020, is not material.
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SEGMENT REPORTING |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 month periods ended June 30, 2021, and 2020 are summarized in the following table (in thousands):
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 below (in thousands):
FINANCING SEGMENT DISAGGREGATION OF REVENUE
We analyze our revenues within our financing segment based on the nature of the arrangement. Our revenues from contracts with customers within our financing segment consist entirely of proceeds from the sale of off-lease equipment.
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Jun. 30, 2021 | |
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.
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INTERIM FINANCIAL STATEMENTS |
INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2021, and 2020, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the three months ended June 30, 2021, and 2020 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2022, 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, 2021 (“2021 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.
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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.
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CONCENTRATIONS OF RISK |
CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 42% of our technology segment’s net sales for the three months ended June 30, 2021, and 37% for the three months ended June 30, 2020.
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REVENUES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||
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 $49.6 million and $54.6 million of receivables from contracts with customers included within financing receivables as of June 30, 2021, and March 31, 2021, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):
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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).
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FINANCING RECEIVABLES AND OPERATING LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FINANCING RECEIVABLES AND OPERATING LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales-type Leases |
The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three months ended June 30, 2021, and 2020 (in thousands):
The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three months ended June 30, 2021, and 2020 (in thousands):
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Notes Receivable Net and Investments in Leases |
The following tables provide a disaggregation of our financing receivables – net (in thousands):
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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):
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Goodwill |
The following table summarizes the changes in the carrying amount of goodwill for the three months ended June 30, 2021 (in thousands):
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Other Intangible Assets |
Our other intangible assets consist of the following on June 30, 2021, and March 31, 2021 (in thousands):
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ALLOWANCE FOR CREDIT LOSSES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Reserves for Credit Losses |
The following table provides the activity in our allowance for credit losses for the three months ended June 30, 2021, and 2020 (in thousands):
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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 June 30, 2021 (in thousands):
The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2021 (in thousands):
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Aging Analysis of Financing Receivables |
The following table provides an aging analysis of our financing receivables as of June 30, 2021 (in thousands):
The following table provides an aging analysis of our financing receivables as of March 31, 2021 (in thousands):
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PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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EARNINGS PER SHARE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Numerators and Denominators Used to Calculate Basic and Diluted Earnings per Common Share |
The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three months ended June 30, 2021, and 2020, respectively (in thousands, except per share data).
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SHARE-BASED COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Grants |
For the three months ended June 30, 2021, we granted 414 shares under the 2017 Director LTIP, and 77,861 restricted shares under the 2012 Employee LTIP. For the three months ended June 30, 2020, we granted 716 shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. A summary of the grants is as follows:
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 June 30, 2021, and March 31, 2021 (in thousands):
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BUSINESS COMBINATIONS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Systems Management Planning (SMP) [Member] | ||||||||||||||||||||||||||||||||||||||||||||||
Business Combination [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed |
Our sum of consideration transferred was $27.0 million consisting of $29.0 million paid in cash at closing less $2.0 million that was paid back to us in our quarter ended March 31, 2021, related to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):
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SEGMENT REPORTING (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information, by Reportable Segment |
Our reportable segment information for the three month periods ended June 30, 2021, and 2020 are summarized in the following table (in thousands):
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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 below (in thousands):
|
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Net Sales [Member] | Product Concentration Risk [Member] | Cisco Systems [Member] | Technology Segment [Member] | ||
Concentration of risk [Abstract] | ||
Percentage of concentration risk | 42.00% | 37.00% |
LESSEE ACCOUNTING (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Lessee, Operating Lease [Abstract] | ||
Rent expense | $ 1.3 | $ 1.6 |
Maximum [Member] | ||
Lessee, Operating Lease [Abstract] | ||
Operating lease term | 6 years |
GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
Unit
| |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 135,318 |
Goodwill, Impairment Loss, Beginning Balance | (8,673) |
Goodwill, Net Carrying Amount, Beginning Balance | 126,645 |
Foreign currency translations | 6 |
Goodwill, Ending Balance | 135,324 |
Goodwill, Impairment Loss, Ending Balance | (8,673) |
Goodwill, Net Carrying Amount, Ending Balance | $ 126,651 |
Number of reporting units | Unit | 1 |
GOODWILL AND OTHER INTANGIBLE ASSETS, Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Mar. 31, 2021 |
|
Other Intangible Assets [Abstract] | |||
Gross carrying amount | $ 87,831 | $ 87,888 | |
Accumulated amortization | (52,291) | (49,274) | |
Net carrying amount | 35,540 | 38,614 | |
Total amortization expense for customer relationships and other intangible assets | 3,000 | $ 2,500 | |
Customer Relationships and Other Intangibles [Member] | |||
Other Intangible Assets [Abstract] | |||
Gross carrying amount | 77,345 | 77,335 | |
Accumulated amortization | (44,819) | (42,115) | |
Net carrying amount | $ 32,526 | 35,220 | |
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 | $ 10,486 | 10,553 | |
Accumulated amortization | (7,472) | (7,159) | |
Net carrying amount | $ 3,014 | $ 3,394 | |
Capitalized Software Development [Member] | Minimum [Member] | |||
Other Intangible Assets [Abstract] | |||
Estimated useful life | 5 years | ||
Customer Relationships [Member] | Systems Management and Planning, Inc. ("SMP") [Member] | |||
Other Intangible Assets [Abstract] | |||
Estimated useful life | 7 years |
ALLOWANCE FOR CREDIT LOSSES, Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | $ 4,447 | $ 3,189 | |||
Provision for credit losses | (261) | 787 | |||
Write-offs and other | (22) | 0 | |||
Balance | 4,164 | 3,976 | |||
Accounts Receivable [Member] | |||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | 2,064 | 1,781 | |||
Provision for credit losses | (40) | 329 | |||
Write-offs and other | (22) | 0 | |||
Balance | 2,002 | 2,110 | |||
Notes Receivable [Member] | |||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | 1,212 | [1] | 798 | ||
Provision for credit losses | 77 | 341 | |||
Write-offs and other | 0 | 0 | |||
Balance | 1,289 | [1] | 1,139 | ||
Lease Receivables [Member] | |||||
Activity in reserves for credit losses [Roll Forward] | |||||
Balance | 1,171 | [1] | 610 | ||
Provision for credit losses | (298) | 117 | |||
Write-offs and other | 0 | 0 | |||
Balance | $ 873 | [1] | $ 727 | ||
|
ALLOWANCE FOR CREDIT LOSSES, Amortized Cost Basis (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
|||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | $ 34,410 | [1] | $ 153,825 | [2] | ||||||||||
2021/2020 | 83,840 | [1] | 18,085 | [2] | ||||||||||
2020/2019 | 13,769 | [1] | 4,458 | [2] | ||||||||||
2019/2018 | 3,633 | [1] | 1,512 | [2] | ||||||||||
2018/2017 | 663 | [1] | 184 | [2] | ||||||||||
2017 and prior | [1] | 144 | ||||||||||||
Total | 136,459 | [1] | 178,064 | [2] | ||||||||||
Transfers | [3] | (35,916) | [1] | (78,427) | [2] | |||||||||
Net credit exposure | 100,543 | [1] | 99,637 | [2] | ||||||||||
Unguaranteed residual value | 9,071 | 9,453 | ||||||||||||
Lease receivable and initial direct costs of notes receivable, net of amortization | 242 | 425 | ||||||||||||
Notes Receivable [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | 18,918 | 101,482 | ||||||||||||
2021/2020 | 53,721 | 8,718 | ||||||||||||
2020/2019 | 6,627 | 1,643 | ||||||||||||
2019/2018 | 1,143 | 779 | ||||||||||||
2018/2017 | 230 | 19 | ||||||||||||
2017 and prior | 15 | |||||||||||||
Total | 80,654 | 112,641 | ||||||||||||
Transfers | [3] | (24,393) | (66,367) | |||||||||||
Net credit exposure | 56,261 | 46,274 | ||||||||||||
Unguaranteed residual value | 0 | [4] | 0 | [5] | ||||||||||
Lease receivable and initial direct costs of notes receivable, net of amortization | 242 | 425 | ||||||||||||
Lease Receivables [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | 15,492 | 52,343 | ||||||||||||
2021/2020 | 30,119 | 9,367 | ||||||||||||
2020/2019 | 7,142 | 2,815 | ||||||||||||
2019/2018 | 2,490 | 733 | ||||||||||||
2018/2017 | 433 | 165 | ||||||||||||
2017 and prior | 129 | |||||||||||||
Total | 55,805 | 65,423 | ||||||||||||
Transfers | [3] | (11,523) | (12,060) | |||||||||||
Net credit exposure | 44,282 | 53,363 | ||||||||||||
Unguaranteed residual value | 14,207 | [4] | 14,876 | [5] | ||||||||||
Lease receivable and initial direct costs of notes receivable, net of amortization | $ 0 | 0 | ||||||||||||
High CQR [Member] | Minimum [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
Loss rate on credit quality rating | 10.00% | |||||||||||||
High CQR [Member] | Maximum [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
Loss rate on credit quality rating | 100.00% | |||||||||||||
High CQR [Member] | Notes Receivable [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | $ 12,389 | 93,793 | ||||||||||||
2021/2020 | 47,165 | 6,250 | ||||||||||||
2020/2019 | 4,298 | 769 | ||||||||||||
2019/2018 | 529 | 771 | ||||||||||||
2018/2017 | 225 | 19 | ||||||||||||
2017 and prior | 15 | |||||||||||||
Total | 64,621 | 101,602 | ||||||||||||
Transfers | [3] | (20,944) | (63,471) | |||||||||||
Net credit exposure | 43,677 | 38,131 | ||||||||||||
High CQR [Member] | Lease Receivables [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | 9,322 | 28,898 | ||||||||||||
2021/2020 | 16,485 | 5,885 | ||||||||||||
2020/2019 | 4,423 | 1,798 | ||||||||||||
2019/2018 | 1,736 | 463 | ||||||||||||
2018/2017 | 247 | 125 | ||||||||||||
2017 and prior | 98 | |||||||||||||
Total | 32,311 | 37,169 | ||||||||||||
Transfers | [3] | (7,301) | (7,468) | |||||||||||
Net credit exposure | $ 25,010 | 29,701 | ||||||||||||
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] | ||||||||||||||
2022/2021 | $ 6,529 | 7,689 | ||||||||||||
2021/2020 | 6,556 | 2,468 | ||||||||||||
2020/2019 | 2,329 | 550 | ||||||||||||
2019/2018 | 290 | 8 | ||||||||||||
2018/2017 | 5 | 0 | ||||||||||||
2017 and prior | 0 | |||||||||||||
Total | 15,709 | 10,715 | ||||||||||||
Transfers | [3] | (3,449) | (2,896) | |||||||||||
Net credit exposure | 12,260 | 7,819 | ||||||||||||
Average CQR [Member] | Lease Receivables [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | 6,020 | 23,445 | ||||||||||||
2021/2020 | 13,634 | 3,482 | ||||||||||||
2020/2019 | 2,719 | 1,017 | ||||||||||||
2019/2018 | 754 | 270 | ||||||||||||
2018/2017 | 186 | 40 | ||||||||||||
2017 and prior | 31 | |||||||||||||
Total | 23,344 | 28,254 | ||||||||||||
Transfers | [3] | (4,222) | (4,592) | |||||||||||
Net credit exposure | $ 19,122 | 23,662 | ||||||||||||
Low CQR [Member] | Maximum [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
Loss rate on credit quality rating | 1.00% | |||||||||||||
Low CQR [Member] | Notes Receivable [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | $ 0 | 0 | ||||||||||||
2021/2020 | 0 | 0 | ||||||||||||
2020/2019 | 324 | |||||||||||||
2019/2018 | 324 | 0 | ||||||||||||
2018/2017 | 0 | 0 | ||||||||||||
Total | 324 | 324 | ||||||||||||
Transfers | [3] | 0 | 0 | |||||||||||
Net credit exposure | 324 | 324 | ||||||||||||
Low CQR [Member] | Lease Receivables [Member] | ||||||||||||||
Credit Risk Profile, Segregated by Class [Abstract] | ||||||||||||||
2022/2021 | 150 | 0 | ||||||||||||
2021/2020 | 0 | 0 | ||||||||||||
2020/2019 | 0 | 0 | ||||||||||||
2019/2018 | 0 | 0 | ||||||||||||
2018/2017 | 0 | 0 | ||||||||||||
2017 and prior | 0 | |||||||||||||
Total | 150 | 0 | ||||||||||||
Transfers | [3] | 0 | 0 | |||||||||||
Net credit exposure | $ 150 | $ 0 | ||||||||||||
|
ALLOWANCE FOR CREDIT LOSSES, Aging Analysis (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Mar. 31, 2021 |
||||||
---|---|---|---|---|---|---|---|---|
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Billed | $ 8,890 | $ 9,616 | ||||||
Unbilled | 127,569 | 168,448 | ||||||
Total | 136,459 | [1] | 178,064 | [2] | ||||
Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Billed | 5,640 | 5,471 | ||||||
Unbilled | 75,014 | 107,170 | ||||||
Total | 80,654 | 112,641 | ||||||
Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Billed | 3,250 | 4,145 | ||||||
Unbilled | 52,555 | 61,278 | ||||||
Total | 55,805 | 65,423 | ||||||
High CQR [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 64,621 | 101,602 | ||||||
High CQR [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 32,311 | 37,169 | ||||||
Average CQR [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 15,709 | 10,715 | ||||||
Average CQR [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 23,344 | 28,254 | ||||||
Low CQR [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 324 | 324 | ||||||
Low CQR [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 150 | 0 | ||||||
Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 3,064 | 3,810 | ||||||
Past Due [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 598 | 2,231 | ||||||
Past Due [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 2,466 | 1,579 | ||||||
31 to 60 Days Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 577 | 1,452 | ||||||
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 | 38 | 648 | ||||||
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 | 539 | 804 | ||||||
61 to 90 Days Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 555 | 1,042 | ||||||
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 | 5 | 910 | ||||||
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 | 550 | 132 | ||||||
> 90 Days Past Due [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 1,932 | 1,316 | ||||||
> 90 Days Past Due [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 555 | 673 | ||||||
> 90 Days Past Due [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 1,377 | 643 | ||||||
Current [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 5,826 | 5,806 | ||||||
Current [Member] | Notes Receivable [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | 5,042 | 3,240 | ||||||
Current [Member] | Lease Receivables [Member] | ||||||||
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract] | ||||||||
Total | $ 784 | $ 2,566 | ||||||
|
PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Mar. 31, 2021 |
---|---|---|
Other current assets [Abstract] | ||
Deposits & funds held in escrow | $ 461 | $ 759 |
Prepaid assets | 11,547 | 9,939 |
Other | 301 | 278 |
Total | 12,309 | 10,976 |
Property, equipment and other assets [Abstract] | ||
Property and equipment, net | 7,607 | 7,388 |
Deferred costs - non-current | 17,645 | 19,063 |
Right-of-use assets | 7,580 | 8,763 |
Other | 8,450 | 7,075 |
Total | $ 41,282 | $ 42,289 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Total | Total |
Other current liabilities [Abstract] | ||
Accrued expenses | $ 13,638 | $ 13,598 |
Accrued income taxes payable | 6,564 | 4,439 |
Short-term lease liability | 3,561 | 3,934 |
Other | 6,107 | 8,090 |
Total | $ 29,870 | $ 30,061 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total | Total |
Other liabilities [Abstract] | ||
Deferred revenue - non-current | $ 24,324 | $ 26,309 |
Long-term lease liability | 4,180 | 5,040 |
Other | 5,285 | 5,330 |
Total | $ 33,789 | $ 36,679 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total | Total |
CREDIT FACILITY AND NOTES PAYABLE (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021
USD ($)
Component
|
Jul. 02, 2021
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
Credit Facility [Abstract] | |||
Maximum borrowing capacity under credit facility | $ 275.0 | ||
Subsequent Event [Member] | |||
Credit Facility [Abstract] | |||
Maximum borrowing capacity under credit facility | $ 350.0 | ||
Recourse Note Payable [Member] | |||
Notes Payable [Abstract] | |||
Weighted average interest rate of notes | 3.50% | ||
Notes Payable [Member] | Recourse [Member] | |||
Notes Payable [Abstract] | |||
Long-term Debt | $ 17.0 | $ 18.1 | |
Weighted average interest rate of notes | 3.50% | ||
Notes Payable [Member] | Non-recourse [Member] | |||
Notes Payable [Abstract] | |||
Long-term Debt | $ 15.3 | $ 56.1 | |
Weighted average interest rate of notes | 3.66% | 3.35% | |
WFCDF [Member] | |||
Credit Facility [Abstract] | |||
Number of components under credit facility | Component | 2 | ||
Maximum borrowing capacity under credit facility | $ 275.0 | ||
Guarantor obligations for credit facility, maximum | $ 10.5 | ||
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 | $ 139.6 | $ 98.7 | |
WFCDF [Member] | Account Receivable Component [Member] | |||
Credit Facility [Abstract] | |||
Amount outstanding under credit facility | 0.0 | $ 0.0 | |
Maximum borrowing capacity under credit facility | $ 100.0 | ||
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 | $ 350.0 |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Earnings Per Share, Basic and Diluted [Abstract] | ||
Net earnings attributable to common shareholders - basic and diluted | $ 23,518 | $ 17,360 |
Basic and diluted common shares outstanding [Abstract] | ||
Weighted average common shares outstanding - basic (in shares) | 13,333 | 13,322 |
Effect of dilutive shares (in shares) | 108 | 66 |
Weighted average shares common outstanding - diluted (in shares) | 13,441 | 13,388 |
Earnings per common share - basic (in dollars per share) | $ 1.76 | $ 1.30 |
Earnings per common share - diluted (in dollars per share) | $ 1.75 | $ 1.30 |
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Mar. 18, 2021 |
May 20, 2020 |
|
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) | 17,629 | 0 | ||
Common stock repurchased during the period | $ 1.6 | |||
Shares repurchased to satisfy tax withholding obligation (in shares) | 27,715 | 37,640 | ||
Value of shares repurchased to satisfy tax withholding obligation | $ 2.6 | $ 2.7 |
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Additional Disclosures [Abstract] | ||
Vested share-based awards withheld to satisfy income tax obligations (in shares) | 27,715 | 37,640 |
Vested share-based awards withheld to satisfy income tax obligations | $ 2.6 | $ 2.7 |
Restricted Stock [Member] | ||
Number of Shares [Roll Forward] | ||
Nonvested at beginning of period (in shares) | 183,378 | |
Granted (in shares) | 78,275 | |
Vested (in shares) | (81,276) | |
Nonvested at end of period (in shares) | 180,377 | |
Weighted Average Grant-date Fair Value [Roll Forward] | ||
Nonvested at beginning of period (in dollars per share) | $ 74.97 | |
Granted (in dollars per share) | 92.20 | |
Vested (in dollars per share) | 78.32 | |
Nonvested at end of period (in dollars per share) | $ 80.94 | |
2017 Director LTIP [Member] | Restricted Stock [Member] | ||
Number of Shares [Roll Forward] | ||
Granted (in shares) | 414 | 716 |
2012 Employee LTIP [Member] | Restricted Stock [Member] | ||
Number of Shares [Roll Forward] | ||
Granted (in shares) | 77,861 | 89,873 |
SHARE-BASED COMPENSATION, Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Compensation Expense [Abstract] | ||
Total share-based compensation expense | $ 1,735 | $ 1,885 |
401(k) Profit Sharing Plan [Abstract] | ||
Contribution to profit sharing plan | 800 | $ 700 |
Restricted Stock [Member] | ||
Compensation Expense [Abstract] | ||
Unrecognized compensation expense | $ 13,700 | |
Unrecognized compensation expense, period for recognition | 36 months |
INCOME TAXES (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
INCOME TAXES [Abstract] | |
Additions or reductions to gross unrecognized tax benefits | $ 0 |
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Mar. 31, 2021 |
---|---|---|
Assets [Abstract] | ||
Money market funds | $ 6,136 | $ 45,134 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets [Abstract] | ||
Money market funds | 6,136 | 45,134 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Money market funds | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Money market funds | $ 0 | $ 0 |
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract] | |||
Goodwill | $ 126,651 | $ 126,645 | |
Systems Management Planning (SMP) [Member] | |||
Business Combination [Abstract] | |||
Cash portion of the acquisition | $ 29,000 | ||
Receivable related to working capital adjustment | $ 2,000 | ||
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract] | |||
Accounts receivable | $ 14,526 | ||
Other assets | 3,344 | ||
Identified intangible assets | 14,280 | ||
Accounts payable and other current liabilities | (11,424) | ||
Performance obligation | (2,020) | ||
Total identifiable net assets | 18,706 | ||
Goodwill | 8,328 | ||
Total purchase consideration | $ 27,034 | ||
Systems Management Planning (SMP) [Member] | Customer Relationships [Member] | |||
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract] | |||
Estimated useful lives | 7 years |
SEGMENT REPORTING, Reportable Segment Information (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021
USD ($)
Segment
|
Jun. 30, 2020
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
SEGMENT REPORTING [Abstract] | |||
Number of business segments | Segment | 2 | ||
Reportable Segment Information [Abstract] | |||
Net sales | $ 416,649 | $ 355,031 | |
Cost of Sales [Abstract] | |||
Cost of sales | 311,137 | 256,474 | |
Gross profit | 105,512 | 98,557 | |
Selling, general, and administrative | 68,775 | 69,467 | |
Depreciation and amortization | 3,926 | 3,516 | |
Interest and financing costs | 359 | 577 | |
Operating expenses | 73,060 | 73,560 | |
Operating income | 32,452 | 24,997 | |
Other income | 123 | 98 | |
Earnings before tax | 32,575 | 25,095 | |
Net Sales [Abstract] | |||
Contracts with customers | 401,959 | 334,947 | |
Financing and other | 14,690 | 20,084 | |
Net sales | 416,649 | 355,031 | |
Selected Financial Data - Statement of Cash Flow [Abstract] | |||
Depreciation and amortization | 6,082 | 4,779 | |
Purchases of property, equipment and operating lease equipment | 6,994 | 2,277 | |
Selected Financial Data - Balance Sheet [Abstract] | |||
Total assets | 1,077,416 | 1,058,862 | $ 1,076,775 |
Product [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 361,057 | 307,240 | |
Cost of Sales [Abstract] | |||
Cost of sales | 277,227 | 226,634 | |
Net Sales [Abstract] | |||
Net sales | 361,057 | 307,240 | |
Service [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 55,592 | 47,791 | |
Cost of Sales [Abstract] | |||
Cost of sales | 33,910 | 29,840 | |
Net Sales [Abstract] | |||
Net sales | 55,592 | 47,791 | |
Technology Segment [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 400,358 | 341,224 | |
Net Sales [Abstract] | |||
Contracts with customers | 396,541 | 333,987 | |
Financing and other | 3,817 | 7,237 | |
Net sales | 400,358 | 341,224 | |
Operating Segments [Member] | Technology Segment [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 400,358 | 341,224 | |
Cost of Sales [Abstract] | |||
Cost of sales | 304,925 | 254,383 | |
Gross profit | 95,433 | 86,841 | |
Selling, general, and administrative | 66,153 | 65,556 | |
Depreciation and amortization | 3,898 | 3,488 | |
Interest and financing costs | 159 | 265 | |
Operating expenses | 70,210 | 69,309 | |
Operating income | 25,223 | 17,532 | |
Net Sales [Abstract] | |||
Contracts with customers | 396,541 | 333,987 | |
Financing and other | 3,817 | 7,237 | |
Net sales | 400,358 | 341,224 | |
Selected Financial Data - Statement of Cash Flow [Abstract] | |||
Depreciation and amortization | 4,103 | 3,634 | |
Purchases of property, equipment and operating lease equipment | 1,307 | 2,048 | |
Selected Financial Data - Balance Sheet [Abstract] | |||
Total assets | 868,276 | 834,264 | |
Operating Segments [Member] | Technology Segment [Member] | Product [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 344,766 | 293,433 | |
Cost of Sales [Abstract] | |||
Cost of sales | 271,015 | 224,543 | |
Net Sales [Abstract] | |||
Net sales | 344,766 | 293,433 | |
Operating Segments [Member] | Technology Segment [Member] | Service [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 55,592 | 47,791 | |
Cost of Sales [Abstract] | |||
Cost of sales | 33,910 | 29,840 | |
Net Sales [Abstract] | |||
Net sales | 55,592 | 47,791 | |
Operating Segments [Member] | Financing Segment [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 16,291 | 13,807 | |
Cost of Sales [Abstract] | |||
Cost of sales | 6,212 | 2,091 | |
Gross profit | 10,079 | 11,716 | |
Selling, general, and administrative | 2,622 | 3,911 | |
Depreciation and amortization | 28 | 28 | |
Interest and financing costs | 200 | 312 | |
Operating expenses | 2,850 | 4,251 | |
Operating income | 7,229 | 7,465 | |
Net Sales [Abstract] | |||
Contracts with customers | 5,418 | 960 | |
Financing and other | 10,873 | 12,847 | |
Net sales | 16,291 | 13,807 | |
Selected Financial Data - Statement of Cash Flow [Abstract] | |||
Depreciation and amortization | 1,979 | 1,145 | |
Purchases of property, equipment and operating lease equipment | 5,687 | 229 | |
Selected Financial Data - Balance Sheet [Abstract] | |||
Total assets | 209,140 | 224,598 | |
Operating Segments [Member] | Financing Segment [Member] | Product [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 16,291 | 13,807 | |
Cost of Sales [Abstract] | |||
Cost of sales | 6,212 | 2,091 | |
Net Sales [Abstract] | |||
Net sales | 16,291 | 13,807 | |
Operating Segments [Member] | Financing Segment [Member] | Service [Member] | |||
Reportable Segment Information [Abstract] | |||
Net sales | 0 | 0 | |
Cost of Sales [Abstract] | |||
Cost of sales | 0 | 0 | |
Net Sales [Abstract] | |||
Net sales | $ 0 | $ 0 |
SEGMENT REPORTING, Technology Segment Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Disaggregation of Revenue [Abstract] | ||
Net sales | $ 416,649 | $ 355,031 |
Less: Revenue from financing and other | (14,690) | (20,084) |
Revenue from contracts with customers | 401,959 | 334,947 |
Technology Segment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 400,358 | 341,224 |
Less: Revenue from financing and other | (3,817) | (7,237) |
Revenue from contracts with customers | 396,541 | 333,987 |
Technology Segment [Member] | Telecom, Media & Entertainment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 112,192 | 56,652 |
Technology Segment [Member] | Technology [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 69,140 | 69,967 |
Technology Segment [Member] | State and Local Government and Educational Institutions [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 65,415 | 70,563 |
Technology Segment [Member] | Health Care [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 54,688 | 46,535 |
Technology Segment [Member] | Financial Services [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 30,011 | 47,421 |
Technology Segment [Member] | All others [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 68,912 | 50,086 |
Technology Segment [Member] | Cisco Systems [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 166,902 | 127,932 |
Technology Segment [Member] | Dell / EMC [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 26,340 | 31,081 |
Technology Segment [Member] | Juniper Networks [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 24,714 | 13,579 |
Technology Segment [Member] | HP Inc. & HPE [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 17,202 | 17,038 |
Technology Segment [Member] | Arista Networks [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 11,498 | 6,820 |
Technology Segment [Member] | NetApp [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 10,457 | 15,421 |
Technology Segment [Member] | All others [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | $ 143,245 | $ 129,353 |
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