10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-Q

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

For the quarterly period ended September 30, 2021

OR

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

For the transition period from____ to ____.

Commission file number: 1-34167

ePlus inc.

(Exact name of registrant as specified in its charter)

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

13595 Dulles Technology Drive, Herndon, VA 20171-3413

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

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

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

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

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

Yes ☒   No ☐

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

Yes ☒   No ☐

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

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

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

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

Yes ☐  No ☒

The number of shares of common stock outstanding as of November 5, 2021, was 13,508,469.

TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I. Financial Information:
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets as of September 30, 2021, and March 31, 2021	5
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2021, and 2020	6
	Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2021, and 2020	7
	Unaudited Consolidated Statements of Cash Flows for the Three and Six Months Ended September 30, 2021, and 2020	8
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended September 30, 2021, and 2020	10
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
Part II. Other Information:
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		45

2

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or “Exchange Act,” and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are not based on historical fact but are based upon numerous assumptions about future conditions that may not occur. Forward-looking statements are generally identifiable by use of forward-looking words such as “may,” “should,” “would,” “intend,” “estimate,” “will,” “potential,” “possible,” “could,” “believe,” “expect,” “intend,” “plan,” “anticipate,” “project,” and similar expressions. Readers are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements are made based upon information that is currently available or management’s current expectations and beliefs concerning future developments and their potential effects upon us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the matters set forth below:

• the duration and 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;

3

• 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.

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

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30, 2021			March 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	56,950		$	129,562
Accounts receivable—trade, net		457,308			391,567
Accounts receivable—other, net		57,346			41,053
Inventories		134,514			69,963
Financing receivables—net, current		80,082			106,272
Deferred costs		30,691			28,201
Other current assets		12,675			10,976
Total current assets		829,566			777,594
Financing receivables and operating leases—net		105,855			90,165
Deferred tax asset—net		1,469			1,468
Property, equipment and other assets		43,895			42,289
Goodwill		126,596			126,645
Other intangible assets—net		32,564			38,614
TOTAL ASSETS	$	1,139,945		$	1,076,775
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	121,263		$	165,162
Accounts payable—floor plan		145,880			98,653
Salaries and commissions payable		36,382			36,839
Deferred revenue		82,937			72,802
Recourse notes payable—current		35,548			5,450
Non-recourse notes payable—current		21,083			50,397
Other current liabilities		32,532			30,061
Total current liabilities		475,625			459,364
Recourse notes payable - long-term		9,360			12,658
Non-recourse notes payable - long-term		4,315			5,664
Other liabilities		37,042			36,679
TOTAL LIABILITIES		526,342			514,365
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding		-			-
Common stock, $0.01 per share par value; 25,000 shares authorized; 13,510 outstanding at September 30, 2021 and 13,503 outstanding at March 31, 2021		146			145
Additional paid-in capital		155,941			152,366
Treasury stock, at cost, 1,070 shares at September 30, 2021 and 993 shares at March 31, 2021		(82,246	)		(75,372	)
Retained earnings		539,547			484,616
Accumulated other comprehensive income—foreign currency translation adjustment		215			655
Total Stockholders’ Equity		613,603			562,410
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,139,945		$	1,076,775

See Notes to Unaudited Consolidated Financial Statements.

5

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended September 30,								Six Months Ended September 30,
	2021			2020		2021			2020
Net sales
Product	$	397,160		$	383,656	$	758,217		$	690,896
Services		60,857			49,425		116,449			97,216
Total		458,017			433,081		874,666			788,112
Cost of sales
Product		297,629			302,963		574,856			529,597
Services		37,386			31,156		71,296			60,996
Total		335,015			334,119		646,152			590,593
Gross profit		123,002			98,962		228,514			197,519
Selling, general, and administrative		74,504			66,889		143,279			136,356
Depreciation and amortization		3,853			3,341		7,779			6,857
Interest and financing costs		342			247		701			824
Operating expenses		78,699			70,477		151,759			144,037
Operating income		44,303			28,485		76,755			53,482
Other income (expense)		(325	)		184		(202	)		282
Earnings before tax		43,978			28,669		76,553			53,764
Provision for income taxes		12,565			8,823		21,622			16,558
Net earnings	$	31,413		$	19,846	$	54,931		$	37,206
Net earnings per common share—basic	$	2.36		$	1.48	$	4.12		$	2.79
Net earnings per common share—diluted	$	2.34		$	1.48	$	4.09		$	2.78
Weighted average common shares outstanding—basic		13,332			13,372		13,333			13,347
Weighted average common shares outstanding—diluted		13,432			13,391		13,431			13,394

See Notes to Unaudited Consolidated Financial Statements.

6

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended September 30,					Six Months Ended September 30,
	2021			2020		2021			2020
NET EARNINGS	$	31,413		$	19,846	$	54,931		$	37,206
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		(506	)		520		(440	)		557
Other comprehensive income		(506	)		520		(440	)		557
TOTAL COMPREHENSIVE INCOME	$	30,907		$	20,366	$	54,491		$	37,763

See Notes to Unaudited Consolidated Financial Statements.

7

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net earnings	$	54,931		$	37,206
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		12,044			9,460
Provision for credit losses		98			1,766
Share-based compensation expense		3,575			3,648
Deferred taxes		(1	)		1,032
Payments from lessees directly to lenders—operating leases		(32	)		(13	)
Gain on disposal of property, equipment, and operaing lease equipment		(525	)		(278	)
Changes in:
Accounts receivable		(85,463	)		1,755
Inventories-net		(64,661	)		(23,381	)
Financing receivables—net		(18,019	)		(54,386	)
Deferred costs and other assets		(6,115	)		(1,052	)
Accounts payable-trade		(43,375	)		21,717
Salaries and commissions payable, deferred revenue, and other liabilities		12,539			10,934
Net cash provided by (used in) operating activities		(135,004	)		8,408
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment		2,553			456
Purchases of property, equipment and operating lease equipment		(16,243	)		(3,267	)
Net cash used in investing activities		(13,690	)		(2,811	)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable		64,815			23,613
Repayments of non-recourse and recourse notes payable		(29,386	)		(40,529	)
Repurchase of common stock		(6,874	)		(4,487	)
Repayments of financing of acquisitions		-			(421	)
Net borrowings (repayments) on floor plan facility		47,227			91,554
Net cash provided by financing activities		75,782			69,730
Effect of exchange rate changes on cash		300			(477	)
Net increase (decrease) in cash and cash equivalents		(72,612	)		74,850
Cash and cash equivalents, beginning of period		129,562			86,231
Cash and cash equivalents, end of period	$	56,950		$	161,081

8

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)

	Six Months Ended September 30,
	2021			2020
Supplemental disclosures of cash flow information:
Cash paid for interest	$	683		$	739
Cash paid for income taxes	$	24,511		$	12,348
Cash paid for amounts included in the measurement of lease liabilities	$	2,280		$	2,975
Schedule of non-cash investing and financing activities:
Proceeds from sale of property, equipment, and leased equipment	$	100		$	-
Purchases of property, equipment, and operating lease equipment	$	(2,386	)	$	(393	)
Borrowing of non-recourse and recourse notes payable	$	41,195		$	35,780
Repayments of non-recourse and recourse notes payable	$	(32	)	$	(13	)
Vesting of share-based compensation	$	8,398		$	7,916
New operating lease assets obtained in exchange for lease obligations	$	1,070		$	774

See Notes to Unaudited Consolidated Financial Statements.

9

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

	Six Months Ended September 30, 2021
	Common Stock					Additional Paid-In		Treasury			Retained		Accumulated Other Comprehensive
	Shares			Par Value		Capital		Stock			Earnings		Income			Total
Balance, March 31, 2021		13,503		$	145	$	152,366	$	(75,372	)	$	484,616	$	655		$	562,410
Issuance of restricted stock awards		78			1		-		-			-		-			1
Share-based compensation		-			-		1,735		-			-		-			1,735
Repurchase of common stock		(45	)		-		-		(4,111	)		-		-			(4,111	)
Net earnings		-			-		-		-			23,518		-			23,518
Foreign currency translation adjustment		-			-		-		-			-		66			66
Balance, June 30, 2021		13,536		$	146	$	154,101	$	(79,483	)	$	508,134	$	721		$	583,619
Issuance of restricted stock awards		6			-		-		-			-		-			-
Share-based compensation		-			-		1,840		-			-		-			1,840
Repurchase of common stock		(32	)		-		-		(2,763	)		-		-			(2,763	)
Net earnings		-			-		-		-			31,413		-			31,413
Foreign currency translation adjustment		-			-		-		-			-		(506	)		(506	)
Balance, September 30, 2021		13,510		$	146	$	155,941	$	(82,246	)	$	539,547	$	215		$	613,603

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

See Notes to Unaudited Consolidated Financial Statements.

10

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions 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 six months ended September 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 six months ended September 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 40% and 41% of our technology segment’s net sales for the three months ended September 30, 2021, and 2020, respectively, and 41% and 40% of our technology segment’s net sales for the six months ended September 30, 2021, and 2020, respectively.

SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2021.

2. REVENUES

CONTRACT BALANCES

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $53.8 million and $54.6 million of receivables from contracts with customers included within financing receivables as of September 30, 2021, and March 31, 2021, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	September 30, 2021		March 31, 2021
Current (included in deferred revenue)	$	82,184	$	72,299
Non-current (included in other liabilities)	$	27,813	$	26,042

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Revenue recognized from the beginning contract liability balance was $14.6 million and $36.1 million for the three and six months ended September 30, 2021, respectively, and $11.3 million and $26.9 million for the three and six months ended September 30, 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):

Remainder of the year ending March 31, 2022	$	26,309
Year ending March 31, 2023		24,656
Year ending March 31, 2024		12,595
Year ending March 31, 2025		2,920
Year ending March 31, 2026 and thereafter		1,467
Total remaining performance obligations	$	67,947

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.

3. 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. Often, our leases provide the lessee a bargain purchase option.

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three and six months ended September 30, 2021, and 2020 (in thousands):

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Net sales	$	5,962	$	7,655	$	9,779	$	17,818
Cost of sales		4,926		5,402		8,291		10,729
Gross profit	$	1,036	$	2,253	$	1,488	$	7,089

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three and six months ended September 30, 2021, and 2020 (in thousands):

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Interest income on sales-type leases	$	1,000	$	1,884	$	2,290	$	4,103
Lease income on operating leases	$	6,634	$	3,900	$	11,844	$	7,738

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FINANCING RECEIVABLES—NET

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

September 30, 2021	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	104,066		$	54,261		$	158,327
Unguaranteed residual value (1)		-			13,411			13,411
Initial direct costs, net of amortization		271			-			271
Unearned income		-			(7,095	)		(7,095	)
Allowance for credit losses (2)		(1,687	)		(672	)		(2,359	)
Total, net	$	102,650		$	59,905		$	162,555
Reported as:
Current	$	55,928		$	24,154		$	80,082
Long-term		46,722			35,751			82,473
Total, net	$	102,650		$	59,905		$	162,555

(1) Includes unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 6, “Allowance for Credit Losses” for details.

March 31, 2021	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	112,641		$	68,393		$	181,034
Unguaranteed residual value (1)		-			14,876			14,876
Initial direct costs, net of amortization		425			-			425
Unearned income		-			(8,393	)		(8,393	)
Allowance for credit losses (2)		(1,212	)		(1,171	)		(2,383	)
Total, net	$	111,854		$	73,705		$	185,559
Reported as:
Current	$	73,175		$	33,097		$	106,272
Long-term		38,679			40,608			79,287
Total, net	$	111,854		$	73,705		$	185,559

(1) Includes unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 6, “Allowance for Credit Losses” for details.

OPERATING LEASES—NET

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

	September 30, 2021			March 31, 2021
Cost of equipment under operating leases	$	34,082		$	18,748
Accumulated depreciation		(10,700	)		(7,870	)
Investment in operating lease equipment—net (1)	$	23,382		$	10,878

(1) Amounts include estimated unguaranteed residual values of $4.6 million and $2.5 million as of September 30, 2021, and March 31, 2021, respectively.

TRANSFERS OF FINANCIAL ASSETS

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

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of  September 30, 2021, and March 31, 2021, we had financing receivables of $22.6 million and $60.5 million, respectively, and operating leases of $8.1 million and $3.3 million, respectively, which were collateral for non-recourse notes payable. See Note 8, ‘'Credit Facility and Notes Payable.'’

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For transfers accounted for as sales, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. During the three months ended September 30, 2021, and 2020, we recognized net gains of $10.1 million and $4.5 million, respectively, and total proceeds from these sales were $615.0 million and $118.5 million, respectively. For the year to date periods ended September 30, 2021, and 2020, we recognized net gains of $13.3 million and $7.0 million, respectively, and total proceeds from these sales were $690.3 million and $191.7 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenue, which is recognized as we perform the services. As of September 30, 2021, and March 31, 2021, we had deferred revenue of $0.5 million and $0.3 million, respectively, 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 September 30, 2021, the total potential payments that could result from these indemnities is immaterial.

4. 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 as part of selling, general and administrative expenses for the three months ended September 30, 2021, and $1.5 million for the three months ending September 30, 2020, and $2.6 million and $3.1 million for the six months ended September 30, 2021, and 2020, respectively.

5. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2021 (in thousands):

	Six months ended September 30, 2021
	Goodwill			Accumulated Impairment Loss			Net Carrying Amount
Beginning balance	$	135,318		$	(8,673	)	$	126,645
Foreign currency translations		(49	)		-			(49	)
Ending balance	$	135,269		$	(8,673	)	$	126,596

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations. Our entire balance as of September 30, 2021, relates to our technology segment, which we also determined to be one reporting unit. The change in our goodwill balance during the six months ended September 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.

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OTHER INTANGIBLE ASSETS

Our other intangible assets consist of the following on September 30, 2021, and March 31, 2021 (in thousands):

	September 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	$	77,281	$	(47,424	)	$	29,857	$	77,335	$	(42,115	)	$	35,220
Capitalized software development		10,491		(7,784	)		2,707		10,553		(7,159	)		3,394
Total	$	87,772	$	(55,208	)	$	32,564	$	87,888	$	(49,274	)	$	38,614

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 September 30, 2021, and September 30, 2020, respectively, and $6.0 million and $5.0 million for the six months ended September 30, 2021, and 2020, respectively.

6. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the six months ended September 30, 2021, and 2020 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2021	$	2,064		$	1,212		$	1,171		$	4,447
Provision for credit losses		116			479			(497	)		98
Write-offs and other		(64	)		(4	)		(2	)		(70	)
Balance September 30, 2021	$	2,116		$	1,687		$	672		$	4,475

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

The following table provides the amortized cost basis of our financing receivables by credit quality rating “CQR” and by credit origination year as of September 30, 2021 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2022		2021		2020		2019		2018		2017		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	38,015	$	42,542	$	2,256	$	517	$	226	$	10	$	83,566	$	(35,004	)	$	48,562
Average CQR		12,933		4,794		2,104		342		3		-		20,176		(2,655	)		17,521
Low CQR		-		-		-		324		-		-		324		-			324
Total	$	50,948	$	47,336	$	4,360	$	1,183	$	229	$	10	$	104,066	$	(37,659	)	$	66,407
Lease receivables:
High CQR	$	12,716	$	10,504	$	4,253	$	1,424	$	168	$	48	$	29,113	$	(6,911	)	$	22,202
Average CQR		8,906		9,261		2,266		233		141		22		20,829		(5,641	)		15,188
Low CQR		1,497		1,057		-		-		-		-		2,554		-			2,554
Total	$	23,119	$	20,822	$	6,519	$	1,657	$	309	$	70	$	52,496	$	(12,552	)	$	39,944
Total amortized cost (1)	$	74,067	$	68,158	$	10,879	$	2,840	$	538	$	80	$	156,562	$	(50,211	)	$	106,351

(1) Unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $271 thousand are excluded from amortized cost.

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

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We evaluate our customers using an internally assigned CQR:

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

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

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

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2021 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2021		2020		2019		2018		2017		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	93,793	$	6,250	$	769	$	771	$	19	$	101,602	$	(63,471	)	$	38,131
Average CQR		7,689		2,468		550		8		-		10,715		(2,896	)		7,819
Low CQR		-		-		324		-		-		324		-			324
Total	$	101,482	$	8,718	$	1,643	$	779	$	19	$	112,641	$	(66,367	)	$	46,274
Lease receivables:
High CQR	$	28,898	$	5,885	$	1,798	$	463	$	125	$	37,169	$	(7,468	)	$	29,701
Average CQR		23,445		3,482		1,017		270		40		28,254		(4,592	)		23,662
Low CQR		-		-		-		-		-		-		-			-
Total	$	52,343	$	9,367	$	2,815	$	733	$	165	$	65,423	$	(12,060	)	$	53,363
Total amortized cost (1)	$	153,825	$	18,085	$	4,458	$	1,512	$	184	$	178,064	$	(78,427	)	$	99,637

(1) Unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $425 thousand are excluded from amortized cost.

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

The following table provides an aging analysis of our financing receivables as of September 30, 2021 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	653	$	1,658	$	713	$	3,024	$	6,737	$	9,761	$	94,305	$	104,066
Lease receivables		323		493		726		1,542		2,480		4,022		48,474		52,496
Total	$	976	$	2,151	$	1,439	$	4,566	$	9,217	$	13,783	$	142,779	$	156,562

The following table provides an aging analysis of our financing receivables as of March 31, 2021 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	648	$	910	$	673	$	2,231	$	3,240	$	5,471	$	107,170	$	112,641
Lease receivables		804		132		643		1,579		2,566		4,145		61,278		65,423
Total	$	1,452	$	1,042	$	1,316	$	3,810	$	5,806	$	9,616	$	168,448	$	178,064

Our financial assets on nonaccrual status were not significant as of September 30, 2021, and March 31, 2021.

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7. PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

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

	September 30, 2021		March 31, 2021
Other current assets:
Deposits & funds held in escrow	$	453	$	759
Prepaid assets		11,703		9,939
Other		519		278
Total	$	12,675	$	10,976
Property, equipment and other assets
Property and equipment, net	$	7,368	$	7,388
Deferred costs - non-current		19,770		19,063
Right-of-use assets		7,562		8,763
Other		9,195		7,075
Total	$	43,895	$	42,289
Other current liabilities:
Accrued expenses	$	13,856	$	13,598
Accrued income taxes payable		2,146		4,439
Short-term lease liability		3,835		3,934
Other		12,695		8,090
Total	$	32,532	$	30,061
Other liabilities:
Deferred revenue -  non-current	$	28,174	$	26,309
Long-term lease liability		3,816		5,040
Other		5,052		5,330
Total	$	37,042	$	36,679

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.

8. CREDIT FACILITY AND NOTES PAYABLE

CREDIT FACILITY

Throughout the current fiscal year and until October 12, 2021, ePlus Technology, inc. and certain of its subsidiaries (the “Borrowers”), which are part of our technology segment, financed their operations, in addition to funds generated from operations, with a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). This facility provided short-term capital for our technology segment. There were two components of the WFCDF credit facility: (1) a floor plan component, and (2) an accounts receivable component.

Under the WFCDF credit facility, there was an aggregate limit for the two components, except during a temporary uplift, of $275 million. We could elect to temporarily increase the aggregate limit to $350 million for a period of not less than 30 days, provided that all such periods not exceed 150 days in the aggregate in any calendar year. Additionally, the WFCDF credit facility had a limit on the accounts receivable component of $100 million. WFCDF charged 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 September 30, 2021, the limit of the two components of the credit facility was $350 million as result of our election to temporarily uplift the aggregate limit.

Our borrowing availability under the credit facility varied, based upon the value of the receivables and inventory of the Borrowers. We had outstanding balances of $145.9 million and $98.7 million under the floor plan component as of September 30, 2021, and March 31, 2021, respectively. This component is presented as part of as accounts payable – floorplan. Under the accounts receivable component, we had $29 million as of September 30, 2021 and no outstanding balance 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 September 30, 2021, and March 31, 2021.

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The WFCDF credit facility was secured by the assets of the Borrowers. Additionally, the credit facility required a guaranty of $10.5 million by ePlus inc.

The WFCDF credit facility restricted the ability of the Borrowers to pay dividends to ePlus inc. unless their available borrowing met certain thresholds. As of September 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 required that financial statements of the Borrowers be provided within 45 days of each quarter and 90 days of each fiscal year end and required that other operational reports be provided on a regular basis. Either party could terminate with 90 days’ written notice.

On October 13, 2021, we entered into a First Amended and Restated Credit Agreement by and among the Borrowers, WFCDF, as administrative agent thereunder, various banks and other financial institutions (including WFCDF) who are parties thereto as lenders (collectively, the “Lenders”) and others, pursuant to which, among other things, the Lenders established for the benefit of the Borrowers a discretionary senior secured floorplan facility in the aggregate principal amount of up to $375 million, together with a sublimit for a revolving credit facility for up to $100 million (collectively, the “2021 Credit Facility”).

The loss of the 2021 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. As of September 30, 2021, we had $44.9 million in recourse borrowings which includes $29.0 million outstanding under our revolving credit facility with WFCDF, and $15.9 million arising 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 September 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 September 30, 2021, and March 31, 2021, we had $25.4 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 3.59% and 3.35%, as of September 30, 2021, and March 31, 2021, respectively.

9. 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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10. EARNINGS PER SHARE

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

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three and six months ended September 30, 2021, and 2020, respectively (in thousands, except per share data).

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net earnings attributable to common shareholders - basic and diluted	$	31,413	$	19,846	$	54,931	$	37,206
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		13,332		13,372		13,333		13,347
Effect of dilutive shares		100		19		98		47
Weighted average shares common outstanding — diluted		13,432		13,391		13,431		13,394
Earnings per common share - basic	$	2.36	$	1.48	$	4.12	$	2.79
Earnings per common share - diluted	$	2.34	$	1.48	$	4.09	$	2.78

STOCK SPLIT

On November 9, 2021, our Board of Directors declared a two-for-one stock split effected in the form of a stock dividend. The stock split will be in the form of a 100 percent stock dividend payable on December 13, 2021, to shareholders of record at the close of business on November 29, 2021. We expect that our common stock will begin trading at the split-adjusted price on December 14, 2021.

All references made to share or per share amounts in the accompanying unaudited consolidated financial statements and applicable disclosures herein, other than the table immediately below, are presented on a pre-split basis. The following table provides pro forma earnings per share, giving retroactive effect to the stock split (in thousands, except per share data):

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Earnings per common share:
Basic - pro forma		1.18		0.74		2.06		1.39
Diluted - pro forma		1.17		0.74		2.04		1.39
Weighted average common shares outstanding:
Basic - pro forma		26,664		26,744		26,666		26,694
Diluted - pro forma		26,864		26,782		26,862		26,788

As a result of the stock split, all historical per share data and number of shares outstanding presented in future financial statements will be retroactively adjusted.

11. 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.

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During the six months ended September 30, 2021, we purchased 49,028 shares of our outstanding common stock at a value of $4.3 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 six months ended September 30, 2020, we purchased 24,318 shares of our outstanding common stock at a value of $1.8 million under the share repurchase plan; we also purchased 37,640 shares of common stock at a value of $2.7 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

12. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

ePlus’ 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”) was approved by our shareholders on September 16, 2021. The 2021 Employee LTIP is effective October 1, 2021 and replaces the ePlus inc. 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), as approved by our stockholders on September 13, 2012. Beginning October 1, 2021, no further shares will be granted under the 2012 Employee LTIP.

As of September 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) 2012 Employee LTIP.

These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most recent trading day preceding such date if there were no trades on such date.

RESTRICTED STOCK ACTIVITY

For the six months ended September 30, 2021, we granted 6,393 shares under the 2017 Director LTIP, and 77,861 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2020, we granted 9,309 shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. A summary of the grants is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2021		183,378		$	74.97
Granted		84,254		$	92.99
Vested		(92,093	)	$	78.12
Nonvested September 30, 2021		175,539		$	82.00

Upon each vesting period of the restricted stock awards, employees are subject to minimum tax withholding obligations. Under the 2012 Employee LTIP, we purchased enough shares due to participants to satisfy the minimum tax withholding requirements on employee stock awards. For the six months ended September 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. Share-based compensation expense for both the three and six months ended September 30, 2021, and 2020, were $1.8 million and $3.6 million, respectively. Unrecognized compensation expense related to non-vested restricted stock was $12.4 million as of September 30, 2021, which will be fully recognized over the next 33 months.

We also provide our employees with a contributory 401(k) profit sharing plan, to which we may contribute from time to time at our sole discretion. Employer contributions to the plan are always fully vested. Our estimated contribution expense for the plan for the three months ended September 30, 2021, and 2020, was $1.0 million and $0.7 million, respectively. For the six months ended September 30, 2021, and 2020, our estimated contribution expense for the plan was $1.8 million and $1.4 million, respectively.

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13. INCOME TAXES

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

Our total gross unrecognized tax benefits recorded for uncertain income tax, and interest and penalties thereon, were negligible as of September 30, 2021, and September 30, 2020. We had no additions or reductions to our gross unrecognized tax benefits during the six months ended September 30, 2021. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with Codification Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2021, and March 31, 2021 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2021
Assets:
Money market funds	$	136	$	136	$	-	$	-
March 31, 2021
Assets:
Money market funds	$	45,134	$	45,134	$	-	$	-

15. BUSINESS COMBINATIONS

SYSTEMS MANAGEMENT PLANNING, INC. (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):

	Acquisition Date Amount
Accounts receivable	$	14,526
Other assets		3,344
Identified intangible assets		14,280
Accounts payable and other current liabilities		(11,424	)
Performance obligations		(2,020	)
Total identifiable net assets		18,706
Goodwill		8,328
Total purchase consideration	$	27,034

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.

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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.

16. SEGMENT REPORTING

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

Our reportable segment information for the three-and six-month periods ended September 30, 2021, and 2020 are summarized in the following table (in thousands):

	Three Months Ended
	September 30, 2021							September 30, 2020
	Technology		Financing		Total			Technology		Financing		Total
Sales
Product	$	375,444	$	21,716	$	397,160		$	369,934	$	13,722	$	383,656
Service		60,857		-		60,857			49,425		-		49,425
Net sales		436,301		21,716		458,017			419,359		13,722		433,081
Cost of Sales
Product		293,837		3,792		297,629			301,006		1,957		302,963
Service		37,386		-		37,386			31,156		-		31,156
Total cost of sales		331,223		3,792		335,015			332,162		1,957		334,119
Gross Profit		105,078		17,924		123,002			87,197		11,765		98,962
Selling, general, and administrative		70,803		3,701		74,504			62,586		4,303		66,889
Depreciation and amortization		3,825		28		3,853			3,313		28		3,341
Interest and financing costs		199		143		342			1		246		247
Operating expenses		74,827		3,872		78,699			65,900		4,577		70,477
Operating income		30,251		14,052		44,303			21,297		7,188		28,485
Other income (expense)						(325	)						184
Earnings before tax					$	43,978						$	28,669
Net Sales
Contracts with customers	$	430,339	$	1,776	$	432,115		$	412,357	$	1,028	$	413,385
Financing and other		5,962		19,940		25,902			7,002		12,694		19,696
Net Sales	$	436,301	$	21,716	$	458,017		$	419,359	$	13,722	$	433,081
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	4,074	$	1,888	$	5,962		$	3,499	$	1,182	$	4,681
Purchases of property, equipment and operating lease equipment	$	948	$	8,301	$	9,249		$	990	$	-	$	990
Selected Financial Data - Balance Sheet
Total assets	$	902,070	$	237,875	$	1,139,945		$	812,633	$	226,078	$	1,038,711

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	Six Months Ended
	September 30, 2021							September 30, 2020
	Technology		Financing		Total			Technology		Financing		Total
Sales
Product	$	720,210	$	38,007	$	758,217		$	663,367	$	27,529	$	690,896
Service		116,449		-		116,449			97,216		-		97,216
Net sales		836,659		38,007		874,666			760,583		27,529		788,112
Cost of Sales
Product		564,852		10,004		574,856			525,549		4,048		529,597
Service		71,296		-		71,296			60,996		-		60,996
Total cost of sales		636,148		10,004		646,152			586,545		4,048		590,593
Gross Profit		200,511		28,003		228,514			174,038		23,481		197,519
Selling, general, and administrative		136,956		6,323		143,279			128,142		8,214		136,356
Depreciation and amortization		7,723		56		7,779			6,801		56		6,857
Interest and financing costs		358		343		701			266		558		824
Operating expenses		145,037		6,722		151,759			135,209		8,828		144,037
Operating income		55,474		21,281		76,755			38,829		14,653		53,482
Other income (expense)						(202	)						282
Earnings before tax					$	76,553						$	53,764
Net Sales
Contracts with customers	$	826,880	$	7,194	$	834,074		$	746,344	$	1,988	$	748,332
Financing and other		9,779		30,813		40,592			14,239		25,541		39,780
Net Sales	$	836,659	$	38,007	$	874,666		$	760,583	$	27,529	$	788,112
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	8,177	$	3,867	$	12,044		$	7,133	$	2,327	$	9,460
Purchases of property, equipment and operating lease equipment	$	2,255	$	13,988	$	16,243		$	3,101	$	166	$	3,267
Selected Financial Data - Balance Sheet
Total assets	$	902,070	$	237,875	$	1,139,945		$	812,633	$	226,078	$	1,038,711

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TECHNOLOGY SEGMENT DISAGGREGATION OF REVENUE

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized for the three and six month periods ended September 30, 2021, and 2020 in the tables below (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020
Customer end market:
Telecom, Media & Entertainment	$	115,784		$	96,927		$	227,976		$	153,579
Technology		53,752			76,321			122,892			146,288
State and local government and educational institutions		68,662			76,492			134,077			147,055
Healthcare		88,237			59,252			142,925			105,788
Financial Services		37,036			46,732			67,047			94,153
All others		72,830			63,635			141,742			113,720
Net sales		436,301			419,359			836,659			760,583
Less: Revenue from financing and other		(5,962	)		(7,002	)		(9,779	)		(14,239	)
Revenue from contracts with customers	$	430,339		$	412,357		$	826,880		$	746,344

	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020
Vendor
Cisco Systems	$	174,072		$	173,166		$	340,974		$	301,098
Dell / EMC		43,498			15,349			69,838			46,430
Juniper Networks		18,438			24,716			43,152			38,295
HP Inc. & HPE		14,038			16,395			31,240			33,433
Arista Networks		8,047			13,443			19,545			20,263
NetApp		29,536			9,914			39,993			25,335
All others		148,672			166,376			291,917			295,729
Net sales		436,301			419,359			836,659			760,583
Less: Revenue from financing and other		(5,962	)		(7,002	)		(9,779	)		(14,239	)
Revenue from contracts with customers	$	430,339		$	412,357		$	826,880		$	746,344

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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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

This discussion is intended to further the reader’s understanding of our consolidated financial condition and results of operations. It should be read in conjunction with the financial statements included in this quarterly report on Form 10-Q and our 2021 Annual Report. These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Part I, Item 1A, “Risk Factors,” in our 2021 Annual Report, as supplemented in subsequently filed reports, and in Part II, Item 1A. “Risk Factors” in this Report.

EXECUTIVE OVERVIEW

BUSINESS DESCRIPTION

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

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

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

Our go-to-market strategy focuses primarily on diverse end-markets for middle market to large enterprises. We serve customers in markets including telecom, media and entertainment, technology, state and local government and educational institutions (“SLED”), healthcare, and financial services. We sell to customers in the United States (“US”), which accounts for most of our sales, and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, and Singapore. Our technology segment accounts for 96% of our net sales, and 72% of our operating income, while our financing segment accounts for 4% of our net sales, and 28% of our operating income, for the six months ended September 30, 2021.

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BUSINESS TRENDS

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

As COVID-19 impacts continue across the country and globe, we have been adjusting our business activities for the safety of our employees and to best serve our customers in this rapidly evolving environment. Most of our offices are open, with required health and safety protocols in place. However, we have implemented a flexible work from home strategy applicable to all offices and operational continuity plans to provide sufficient resources to continue supporting our customers, and we will continue to evaluate returning to the office on an ongoing basis. Our configuration centers have remained open with our employees working in them following required health and safety protocols. In addition, we also have a procedure to review our employees’ business-related travel in accordance with health regulations and guidance. Our managed service teams are distributed across the US with the ability to leverage technology to provide coverage while working from home. While we and many of our customers and vendor partners have restricted travel, we are leveraging video and other collaborative tools to continue to be responsive.

Our account relationship teams are actively engaging with our customers, to ensure they have the support needed in adjusting to changes in the business environment and government directives. Also, we are working closely with our vendor partners to address varying impacts on their supply chains, which have been impacted by materials shortages.

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

The extent to which the COVID-19 pandemic impacts our business going forward will depend on numerous evolving factors we cannot reliably predict, including the duration and scope of the pandemic including the impact of variants; governmental, business, and individuals’ actions in response to the pandemic; the efficacy of vaccines and boosters, the duration of the vaccination distribution, the willingness of people to be inoculated, and potential vaccine mandates; and the impact on economic activity including the possibility of recession, inflation, or financial market instability. These factors may adversely impact business and government spending on technology as well as our customers’ ability to pay for our products and services on an ongoing basis. This uncertainty also affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions. Refer to Part I, Item 1A, “Risk Factors,” in our 2021 Annual Report, as supplemented in subsequently filed reports, and in Part II, Item 1A. “Risk Factors” in this Report.

Supply constraints: A worldwide shortage of certain IT products is resulting from, among other things, shortages in semiconductors and other components of those products. Like others, we are experiencing ongoing supply constraints that have affected, and could continue to further affect, lead times for delivery of products, the costs of products, vendor return and cancellation policies, and our ability to meet customer demands. We continue to work closely with our suppliers to further mitigate disruptions outside our control. Despite these actions, we believe extended lead times will likely persist for at least the next few quarters.

KEY BUSINESS METRICS

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

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

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Our key business metrics for the three- and six-month periods ended September 30, 2021, and 2020 are summarized in the following tables (dollars in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
Consolidated	2021			2020			2021			2020
Net sales	$	458,017		$	433,081		$	874,666		$	788,112
Gross profit	$	123,002		$	98,962		$	228,514		$	197,519
Gross margin		26.9	%		22.9	%		26.1	%		25.1	%
Operating income margin		9.7	%		6.6	%		8.8	%		6.8	%
Net earnings	$	31,413		$	19,846		$	54,931		$	37,206
Net earnings margin		6.9	%		4.6	%		6.3	%		4.7	%
Net earnings per common share - diluted	$	2.34		$	1.48		$	4.09		$	2.78
Non-GAAP: Net earnings (1)	$	34,806		$	22,470		$	61,159		$	42,677
Non-GAAP: Net earnings per common share - diluted (1)	$	2.59		$	1.68		$	4.55		$	3.19
Adjusted EBITDA (2)	$	50,195		$	33,561		$	88,467		$	64,275
Adjusted EBITDA margin		11.0	%		7.7	%		10.1	%		8.2	%
Purchases of property and equipment used internally	$	948		$	990		$	2,255		$	3,101
Purchases of equipment under operating leases		8,301			-			13,988			166
Total capital expenditures	$	9,249		$	990		$	16,243		$	3,267
Technology Segment
Net sales	$	436,301		$	419,359		$	836,659		$	760,583
Adjusted gross billings (3)	$	664,124		$	601,064		$	1,297,131		$	1,147,458
Gross profit	$	105,078		$	87,197		$	200,511		$	174,038
Gross margin		24.1	%		20.8	%		24.0	%		22.9	%
Operating income	$	30,251		$	21,297		$	55,474		$	38,829
Adjusted EBITDA (2)	$	36,059		$	26,275		$	67,017		$	49,436
Financing Segment
Net sales	$	21,716		$	13,722		$	38,007		$	27,529
Gross profit	$	17,924		$	11,765		$	28,003		$	23,481
Operating income	$	14,052		$	7,188		$	21,281		$	14,653
Adjusted EBITDA (2)	$	14,136		$	7,286		$	21,450		$	14,839

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

We use Non-GAAP Net earnings per common share as a supplemental measure of our performance to gain insight into our operating performance. We believe that the exclusion of other income and acquisition-related amortization expense in calculating Non-GAAP Net earnings per common share provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that Non-GAAP Net earnings per common share provide useful information to investors and others in understanding and evaluating our operating results. However, our use of Non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies, including companies in our industry, might calculate similar Non-GAAP Net earnings and Non-GAAP Net earnings per common share or similarly titled measures differently, which may reduce their usefulness as comparative measures.

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	Three Months Ended September 30,					Six Months Ended September 30,
	2021		2020			2021		2020
GAAP: Earnings before tax	$	43,978	$	28,669		$	76,553	$	53,764
Share based compensation		1,840		1,764			3,575		3,671
Acquisition and integration expense		-		(30	)		-		(1	)
Acquisition related amortization expense		2,661		2,172			5,357		4,400
Other (income) expense		325		(184	)		202		(282	)
Non-GAAP: Earnings before provision for income taxes		48,804		32,391			85,687		61,552
GAAP: Provision for income taxes		12,565		8,823			21,622		16,558
Share based compensation		528		541			1,024		1,128
Acquisition and integration expense		-		(9	)		-		-
Acquisition related amortization expense		750		648			1,507		1,315
Other (income) expense		93		(56	)		58		(86	)
Tax benefit (expense) on restricted stock		62		(26	)		317		(40	)
Non-GAAP: Provision for income taxes		13,998		9,921			24,528		18,875
Non-GAAP: Net earnings	$	34,806	$	22,470		$	61,159	$	42,677
GAAP: Net earnings per common share - diluted	$	2.34	$	1.48		$	4.09	$	2.78
Non-GAAP: Net earnings per common share - diluted	$	2.59	$	1.68		$	4.55	$	3.19

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021			2020
GAAP: Net earnings per common share - diluted	$	2.34	$	1.48	$	4.09		$	2.78
Share based compensation		0.09		0.09		0.18			0.19
Acquisition related amortization expense		0.14		0.11		0.29			0.23
Other (income) expense		0.02		-		0.01			(0.01	)
Tax benefit (expense) on restricted stock		-		-		(0.02	)		-
Total non-GAAP adjustments - net of tax		0.25		0.20		0.46			0.41
Non-GAAP: Net earnings per common share - diluted	$	2.59	$	1.68	$	4.55		$	3.19

(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.

We use Adjusted EBITDA as a supplemental measure of our performance to gain insight into our operating performance. We believe that the exclusion of other income in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating our operating results. However, our use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies, including companies in our industry, might calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

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	Three Months Ended September 30,					Six Months Ended September 30,
Consolidated	2021		2020			2021		2020
Net earnings	$	31,413	$	19,846		$	54,931	$	37,206
Provision for income taxes		12,565		8,823			21,622		16,558
Share based compensation		1,840		1,764			3,575		3,671
Interest and financing costs		199		1			358		266
Acquisition and integration expense		-		(30	)		-		(1	)
Depreciation and amortization		3,853		3,341			7,779		6,857
Other income (expense)		325		(184	)		202		(282	)
Adjusted EBITDA	$	50,195	$	33,561		$	88,467	$	64,275
Technology Segment
Operating income	$	30,251	$	21,297		$	55,474	$	38,829
Depreciation and amortization		3,825		3,313			7,723		6,801
Share based compensation		1,784		1,694			3,462		3,541
Interest and financing costs		199		1			358		266
Acquisition and integration expense		-		(30	)		-		(1	)
Adjusted EBITDA	$	36,059	$	26,275		$	67,017	$	49,436
Financing Segment
Operating income	$	14,052	$	7,188		$	21,281	$	14,653
Depreciation and amortization		28		28			56		56
Share based compensation		56		70			113		130
Adjusted EBITDA	$	14,136	$	7,286		$	21,450	$	14,839

(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 September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Technology segment net sales	$	436,301	$	419,359	$	836,659	$	760,583
Costs incurred related to sales of third party maintenance, software assurance and subscription/Saas licenses, and services		227,823		181,705		460,472	$	386,875
Adjusted gross billings	$	664,124	$	601,064	$	1,297,131	$	1,147,458

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

CONSOLIDATED RESULTS OF OPERATIONS

During the three months ended September 30, 2021, net sales increased 5.8%, or $24.9 million, to $458.0 million, as compared to $433.1 million for the same period in the prior year. Product sales for the three months ended September 30, 2021, increased 3.5% to $397.2 million, an increase of $13.5 million from $383.7 million for the same period in the prior year, due to increased demand from our technology segment customers as well as higher financing revenue. Service sales during the three months ended September 30, 2021, increased 23.1% to $60.9 million, an increase of $11.4 million over prior year services sales of $49.4 million due to increases in both managed services and professional services. In the technology segment, we saw increases in net sales from customers in the healthcare, telecom, media and entertainment, and smaller other categories of customers, which was partially offset by decreases in net sales from customers in technology, financial services and SLED, during the three months ended September 30, 2021, compared to the same period in the prior year.

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For the six months ended September 30, 2021, net sales increased 11.0%, or $86.6 million, to $874.7 million, compared to $788.1 million in the same period in the prior year. Product sales for the six months ended September 30, 2021, increased 9.7%, or $67.3 million, to $758.2 million, compared to $690.9 million in the same period in the prior year. Services sales during the six months ended September 30, 2021, increased 19.8%, or $19.2 million, to $116.4 million compared to prior year services sales of $97.2 million. The increase in net sales was due to increased demand from our customers in telecom, media and entertainment, healthcare and manufacturing markets, which were partially offset by decreases in demand from our customers in technology, financial services, SLED, and all other category of customers, during the six months ended September 30, 2021, compared to the prior year.

Adjusted gross billings increased 10.5%, or $63.1 million, to $664.1 million for the three months ended September 30, 2021, from $601.1 million for the same period in the prior year. There was an increase in adjusted gross billings from our customers in telecom, media and entertainment, healthcare, and financial services industries, which was partially offset by decreases in demand from our customers in SLED and technology. For the six months ended September 30, 2021, adjusted gross billings increased 13.0%, or $149.7 million, to $1,297.1 million, from $1,147.5 million for the same period in the prior year. The increase in adjusted gross billings is due, in part, to the Systems Management Planning, Inc. (“SMP”) acquisition as well as higher demand from our customers in telecom, media and entertainment, and healthcare, which was partially offset by decreases in demand from our customers in technology and SLED.

Consolidated gross profit for the three months ended September 30, 2021, increased $24.0 million, or 24.3%, to $123.0 million, compared with $99.0 million for the same period in the prior year. Consolidated gross margins were 26.9% for the three months ended September 30, 2021, which is an increase of 400 basis points compared to 22.9% for the same period in the prior year. The increase in margins was primarily due to a shift in product mix, as we sold a higher proportion of third-party maintenance, software assurance and subscription/SaaS licenses, which was recognized on a net basis, as well as higher service revenue and service margin, and higher gross profit from our financing segment.

For the six months ended September 30, 2021, consolidated gross profit increased $31.0 million, or 15.7%, to $228.5 million, compared with $197.5 million for the same period in the prior year. Consolidated gross margins were 26.1% for the six months ended September 30, 2021, an increase of 100 basis points compared to 25.1% for the same period in the prior year. The increase in gross margin for the six-month period was due to a shift in product mix, as we sold a higher proportion of third-party maintenance, software assurance and subscription/SaaS licenses, which is recognized on a net basis, as well as higher service revenue and service margins, and higher gross profit from our financing segment.

Our operating expenses for the three months ended September 30, 2021, increased $8.2 million, or 11.7%, to $78.7 million, as compared to $70.5 million for the prior year period. This increase is primarily due to an increase in variable compensation, salaries and benefits driven by increased headcount and higher general and administrative expense due to higher professional fees, software license and maintenance, and travel and entertainment expenses, as travel restrictions from COVID-19 have started to ease. As of September 30, 2021, we had 1,554 employees, an increase of 57 from 1,497 as of September 30, 2020. Our headcount is higher primarily due to the addition of 102 employees joining ePlus from our December 31, 2020, acquisition of SMP.

For the six months ended September 30, 2021, operating expenses increased $7.7 million, or 5.4%, to $151.8 million, as compared to $144.0 million in the same period in the prior year. The increase in operating expenses for the six months ended September 30, 2021, is due to an increase in variable compensation, salaries and benefits driven by increased headcount and higher general and administrative expense due to higher professional fees, software license and maintenance, and travel and entertainment expenses, as travel restrictions from COVID-19 have started to ease. These increases are partially offset by a decrease in our provision for credit losses.

Depreciation and amortization expense increased $0.5 million and $0.9 million for three and six months ended September 30, 2021, respectively, primarily due to our December 31, 2020, acquisition of SMP. Interest and financing costs increased $0.1 million for the three months ended September 30, 2021 and decreased $0.1 million for the six months ended September 30, 2021, primarily driven by the timing of borrowings from our credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”) offset by a decrease in interest and financing costs in our financing segment.

As a result, operating income for the three months ended September 30, 2021, increased $15.8 million, or 55.5%, to $44.3 million as compared to $28.5 million for the same period in the prior year. For the six months ended September 30, 2021, operating income increased $23.3 million, or 43.5%, to $76.8 million, as compared to $53.5 million for the same period in the prior year.

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Consolidated net earnings for the three months ended September 30, 2021, were $31.4 million, an increase of 58.3%, or $11.6 million, over the prior year’s results, due to the increase in gross profit and offset by increased operating expenses and the provision for income taxes. For the six months ended September 30, 2021, the consolidated net earnings were $54.9 million, an increase of 47.6%, or $17.7 million, compared to the prior year’s results, due to the increase in revenues and gross profit mostly offset by an increase in operating expenses and the provision for income taxes.

Our effective tax rate for the three and six months ended September 30, 2021, was 28.6% and 28.2% respectively, compared with 30.8% for the same periods in the prior year. The change in our effective income tax rate was primarily due to an adjustment to the federal benefit from state taxes in the prior year period.

Adjusted EBITDA increased $16.6 million, or 49.6%, to $50.2 million and Adjusted EBITDA margin increased 330 basis points to 11.0% for the three months ended September 30, 2021, as compared to the prior year period of 7.7%. For the six months ended September 30, 2021, adjusted EBITDA increased $24.2 million, or 37.6%, to $88.5 million and the adjusted EBITDA margin increased 190 basis points to 10.1% as compared to the prior year period of 8.2%.

Diluted earnings per share increased 58.1%, or $0.86, to $2.34 per share for the three months ended September 30, 2021, as compared to $1.48 per share for the three months ended September 30, 2020. Non-GAAP diluted earnings per share increased 54.2%, or $0.91, to $2.59 for the three months ended September 30, 2021, as compared to $1.68 for the three months ended September 30, 2020. For the six months ended September 30, 2021, diluted earnings per share increased 47.1%, or $1.31, to $4.09 per share, as compared to $2.78 per share in the prior year period. Non-GAAP diluted earnings per share increased 42.6%, or $1.36, to $4.55 for the six months ended September 30, 2021, as compared to $3.19 for the six months ended September 30, 2020.

Cash and cash equivalents decreased by 56.0% to $57.0 million as of September 30, 2021, as compared to $129.6 million as of March 31, 2021, primarily due to increases in our accounts receivable and inventory and a decrease in accounts payable—trade, partially offset by net borrowings on the floor plan component of our credit facility. Additional uses of cash during the three months ended September 30, 2021, included cash paid of $6.9 million to repurchase outstanding shares of our common stock. Our cash on hand, funds generated from operations, amounts available under our credit facility, and the ability to monetize our investment portfolio have provided sufficient liquidity for our business.

SEGMENT OVERVIEW

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

TECHNOLOGY SEGMENT

The technology segment derives revenue from sales of product, project-related advanced professional services, managed services and staff augmentation. The technology segment sells primarily to corporate customers, state and local governments, and higher education institutions on a nationwide basis, with geographic concentrations relating to our physical locations. The technology segment also provides Internet-based business-to-business supply chain management solutions for information technology products.

Customers who purchase IT equipment and services from us may have a customer master agreement (“CMA”) with our company, which stipulates the terms and conditions of the relationship. Some CMAs contain pricing arrangements, and most contain mutual voluntary termination clauses. Our other customers place orders using purchase orders without a CMA in place, or with other documentation customary for the business. Often, our work with state and local governments is based on public bids and our written bid responses. Our service engagements are generally governed by statements of work and are primarily fixed price (with allowance for changes); however, some service agreements are based on time and materials.

We endeavor to minimize the cost of sales through incentive programs provided by vendors and distributors. The programs we qualify for are generally set by our reseller authorization level with the vendor. The authorization level we achieve and maintain governs the types of products we can resell as well as such items as variable discounts applied against the list price, funds provided for the marketing of these products and other special promotions. These authorization levels are achieved by us through purchase volume, certifications held by sales executives or engineers and/or contractual commitments by us. The authorization levels are costly to maintain, and these programs continually change and, therefore, there is no guarantee of future reductions of costs provided by these vendor consideration programs.

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FINANCING SEGMENT

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

Financing revenue generally falls into the following three categories:

• Portfolio income: Interest income from financing receivables and rents due under operating leases;

• Transactional gains: Net gains or losses on the sale of financial assets; and

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

We also recognize revenue from events that occur after the initial sale of a financial asset and remarketing fees from certain residual value investments.

FLUCTUATIONS IN OPERATING RESULTS

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

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

CRITICAL ACCOUNTING ESTIMATES

Our critical accounting estimates have not changed from those reported in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report.

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SEGMENT RESULTS OF OPERATIONS

The three and six months ended September 30, 2021, compared to the three and six months ended September 30, 2020

TECHNOLOGY SEGMENT

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

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net sales
Product	$	375,444	$	369,934	$	720,210	$	663,367
Services		60,857		49,425		116,449		97,216
Total		436,301		419,359		836,659		760,583
Cost of sales
Product		293,837		301,006		564,852		525,549
Services		37,386		31,156		71,296		60,996
Total		331,223		332,162		636,148		586,545
Gross profit		105,078		87,197		200,511		174,038
Selling, general, and administrative		70,803		62,586		136,956		128,142
Depreciation and amortization		3,825		3,313		7,723		6,801
Interest and financing costs		199		1		358		266
Operating expenses		74,827		65,900		145,037		135,209
Operating income	$	30,251	$	21,297	$	55,474	$	38,829
Adjusted gross billings	$	664,124	$	601,064	$	1,297,131	$	1,147,458
Adjusted EBITDA	$	36,059	$	26,275	$	67,017	$	49,436

Net sales: Net sales for the three months ended September 30, 2021, were $436.3 million compared to $419.4 million for the same period in the prior year, an increase of 4.0% or $16.9 million, due to increases in net sales from customers in the healthcare, telecom, media and entertainment, and smaller other categories of customers, which was partially offset by decreases in net sales from customers in technology, financial services and SLED. Product sales increased 1.5%, or $5.5 million, to $375.4 million. Services revenues increased 23.1%, or $11.4 million compared to the same period in the prior year to $60.9 million due to increase in managed and professional services for the three months ended September 30, 2021.

For the six months ended September 30, 2021, net sales increased 10.0%, or $76.1 million to $836.7 million compared to $760.6 million during the same period in the prior year. Product sales for the six months ended September 30, 2021, increased 8.6%, or $56.8 million to $720.2 million, and service revenue increased by 19.8%, or $19.2 million, to $116.4 million compared to $97.2 million during the same period in the prior year.

Adjusted gross billings increased 10.5%, or $63.1 million, to $664.1 million for the three months ended September 30, 2021, from $601.1 million for the same period in the prior year. The increase in adjusted gross billings was due, in part, to the SMP acquisition as well as higher demand from our current customers. For the six months ended September 30, 2021, adjusted gross billings increased 13.0%, or $149.7 million, to $1,297.1 million, from $1,147.5 million for the same period in the prior year. The increase in adjusted gross billings is due to higher demand from the same customer end markets that were previously identified for the increase in net sales.

We rely on our vendors to fulfill a large majority of shipments to our customers. As of September 30, 2021, we had open orders of $707.1 million and deferred revenue of $110.0 million. As of September 30, 2020, we had open orders of $389.7 million and deferred revenue of $77.1 million.

We analyze net sales by customer end market and by vendor, as opposed to discrete product and service categories. The percentage of net sales by industry and vendor for the twelve-month periods ended September 30, 2021, and 2020 are summarized below:

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	Twelve Months Ended September 30,
	2021			2020			Change
Revenue by customer end market:
Telecom, Media & Entertainment		28	%		20	%		8	%
SLED		15	%		16	%		(1	%)
Healthcare		15	%		15	%		0	%
Technology		14	%		19	%		(5	%)
Financial Services		11	%		13	%		(2	%)
All others		17	%		17	%		0	%
Total		100	%		100	%

	Twelve Months Ended September 30,
	2021			2020			Change
Revenue by vendor:
Cisco Systems		36	%		39	%		(3	%)
Dell / EMC		8	%		7	%		1	%
Juniper Networks		6	%		5	%		1	%
NetApp		5	%		4	%		1	%
HP Inc. & HPE		4	%		4	%		0	%
Arista Networks		3	%		3	%		0	%
All others		38	%		38	%		0	%
Total		100	%		100	%

Our revenues by customer end market have remained consistent over the year with over 80% of our revenues generated from customers within the five end markets identified above. During the trailing twelve-month period ended September 30, 2021, we had an increase in the percentage of total revenues from customers in the telecom, media and entertainment industry, and decreases in the percentage of total revenues in the technology, financial services, and SLED markets. These changes were driven by changes in customer buying cycles, and the timing of specific IT related initiatives, rather than the acquisition or loss of a customer or set of customers.

Most of our revenues by vendor are derived from our top six suppliers, which, when combined, accounted for over 60% of total revenues for the twelve-month periods ended September 30, 2021, and 2020. None of the vendors included within the “other” category exceeded 5% of total revenues.

Cost of sales: Cost of sales for the three months ended September 30, 2021, decreased 0.3% or $1.0 million to $331.2 million compared to $332.2 million for the same period in the prior year. Our gross margin increased 330 basis points to 24.1% for the three months ended September 30, 2021, compared to 20.8% for the same period in the prior year. The increase in gross margin was driven by higher product margin, where a higher proportion of sales of third-party maintenance, software assurance, subscription/SaaS licenses, and services are recognized on a net basis, and higher service margin. Cost of sales for the six months ended September 30, 2021, increased 8.5% or $49.6 million which is in-line with the increase in net sales. For the six months ended September 30, 2021, gross margin increased by 110 basis points to 24.0%, as compared to 22.9% for the prior year period, primarily due to higher service margin, and a higher proportion of sales of third-party maintenance, software assurance, subscription/SaaS licenses, and services, which are recognized on a net basis.

Selling, general, and administrative: Selling, general, and administrative expenses of $70.8 million for the three months ended September 30, 2021, increased by $8.2 million, or 13.1% from $62.6 million for the same period in the prior year. Salaries and benefits increased $7.1 million, or 13.1% to $60.8 million, compared to $53.8 million during the prior year mainly due to an increase in the number of employees. Our technology segment had 1,522 employees as of September 30, 2021, an increase of 62 from 1,460 as of September 30, 2020. Our headcount as of September 30, 2021 incorporates the addition of 102 employees from the December 31, 2020, acquisition of SMP. For the six months ended September 30, 2021, selling, general, and administrative expenses increased by $8.8 million, or 6.9%, to $137.0 million compared to $128.1 million for the same period in the prior year. Salaries and benefits increased $7.9 million, or 7.2% to $119.0 million, compared to $110.8 million during the same period in the prior year.

General and administrative expenses increased $1.3 million, or 14.6%, to $9.9 million during the three months ended September 30, 2021, compared to the same period in the prior year, due to higher professional fees, software license and maintenance, and travel and entertainment expenses, as travel restrictions from COVID-19 have started to ease. For the six months ended September 30, 2021, general and administrative expenses increased $1.4 million, or 8.2%, to $18.1 million. The increase in selling, general and administrative expenses was primarily due to an increase in travel and entertainment expenses, legal and professional fees and software license and maintenance. The provision for credit losses was $0.5 million lower than for the same period in the prior year.

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Depreciation and amortization: Depreciation and amortization increased $0.5 million, or 15.5%, to $3.8 million during the three months ended September 30, 2021, as compared to $3.3 million in the prior year period primarily due to the amortization of the intangible assets acquired in our acquisition of SMP. For the six months ended September 30, 2021, depreciation and amortization increased $0.9 million, or 13.6%, to $7.7 million as compared to $6.8 million for the same period in the prior year.

Interest and financing costs: Interest and financing costs were $0.2 million, and $0.4 million for the three and six months ended September 30, 2021, an increase of $0.2 million and $0.1 million, respectively, as compared to the same periods in the prior year. The increase is primarily due to timing of our borrowings from our WFCDF credit facility and borrowings on an installment payment arrangement, for which there were no comparable borrowing as of September 30, 2020.

Segment operating income: As a result of the foregoing, operating income was $30.3 million, an increase of $9.0 million, or 42.0%, for the three months ended September 30, 2021, as compared to $21.3 million for the same period in the prior year. For the six months ended September 30, 2021, operating income was $55.5 million, compared to $38.8 million for the same period in the prior year, an increase of $16.6 million, or 42.9%.

For the three months ended September 30, 2021, Adjusted EBITDA was $36.1 million, an increase of $9.8 million, or 37.2%, compared to $26.3 million for the same period in the prior year. Adjusted EBITDA was $67.0 million, an increase of $17.6 million, or 35.6%, for the six months ended September 30, 2021, compared to $49.4 million for the same period in the prior year.

FINANCING SEGEMENT

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

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net sales	$	21,716	$	13,722	$	38,007	$	27,529
Cost of sales		3,792		1,957		10,004		4,048
Gross profit		17,924		11,765		28,003		23,481
Selling, general, and administrative		3,701		4,303		6,323		8,214
Depreciation and amortization		28		28		56		56
Interest and financing costs		143		246		343		558
Operating expenses		3,872		4,577		6,722		8,828
Operating income	$	14,052	$	7,188	$	21,281	$	14,653
Adjusted EBITDA	$	14,136	$	7,286	$	21,450	$	14,839

Net sales: Net sales increased by $8.0 million, or 58.3%, to $21.7 million for the three months ended September 30, 2021, as compared to prior year results due to higher post contract earnings and higher transactional gains. During the quarter ended September 30, 2021, we recognized net gains on sales of financial assets of $10.1 million, which included several large transactions that closed in July 2021, and the proceeds received from these sales were $615.0 million. Net gains on the sale of financial assets for the quarter ended September 30, 2020, was $4.5 million and the proceeds from these sales were $118.5 million.

For the six months ended September 30, 2021, net sales increased to $38.0 million, an increase of $10.5 million, or 38.1% as compared to the same period in the prior year of $27.5 million due to higher post contract earnings and higher transactional gains, which were partially offset by lower other financing revenues. During the six months ended September 30, 2021, we recognized net gains on sales of financial assets of $13.3 million, which included several large transactions that closed in July 2021, and the proceeds received from these sales were $690.3 million. For the six months ended September 30, 2020, we recognized net gains on sales of financial assets of $7.0 million, and the proceeds from these sales were $191.7 million.

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At September 30, 2021, we had $166.9 million in financing receivables and operating leases, compared to $180.7 million as of September 30, 2020, a decrease of $13.8 million, or 7.6%.

Cost of sales: Cost of sales increased $1.8 million and $6.0 million for the three and six months ended September 30, 2021, respectively, compared to the prior year results due to higher cost of sales on off-lease equipment and higher depreciation expense from operating leases. Gross profit increased by 52.4% to $17.9 million for the three months ended September 30, 2021, and increased by 19.3% to $28.0 million, for the six months ended September 30, 2021, as compared to the prior year periods.

Selling, general and administrative: For the three and six months ended September 30, 2021, selling, general and administrative expenses decreased $0.6 million and $1.9 million, respectively, compared to the prior year periods, primarily due to decrease in the provision for credit losses and decrease in variable compensation.

Interest and financing costs: Interest and financing costs decreased by 41.9% to $0.1 million for the three months ended September 30, 2021, and decreased by 38.5% to $0.3 million for the six months ended September 30, 2021, compared to the prior year, due to a decrease in the average balance on total notes payable outstanding. Total notes payable for the financing segment was $25.4 million as of September 30, 2021, a decrease of $14.9 million, or 37.0%, as compared to $40.3 million as of September 30, 2020. Our weighted average interest rate for non-recourse notes payable was 3.59% and 3.15%, as of September 30, 2021, and 2020, respectively. Our weighted average interest rate for recourse notes payable was 2.55% as of September 30, 2020. We did not have any recourse debt as of September 30, 2021.

Segment operating income: As a result of the foregoing, both operating income and Adjusted EBITDA increased $6.9 million to $14.1 million, for the three months ended September 30, 2021, as compared to the prior year period. For the six months ended September 30, 2021, both operating income and Adjusted EBITDA increased by $6.6 million to $21.3 million and $21.5 million, respectively, as compared to the same period in the prior year.

CONSOLIDATED

Other income: Other income and expense for both the three and six months ended September 30, 2021, was an expense of $0.3 million and $0.2 million, respectively, due to unfavorable foreign exchange rates, compared to an income of $0.2 million and $0.3 million in the three and six month periods in the prior year, respectively.

Income taxes: Our provision for income tax expense was $12.6 million and $21.6 million for the three and six months ended September 30, 2021, as compared to $8.8 million and $16.6 million for the same periods in the prior year. Our effective income tax rates for the three and six months ended September 30, 2021, were 28.6% and 28.2%, compared to 30.8% for the three and six months ended September 30, 2020, respectively. The change in our effective income tax rate was primarily due to an adjustment to the federal benefit from state taxes in the prior year period.

Net earnings: The foregoing resulted in net earnings of $31.4 million for the three months ended September 30, 2021, an increase of $11.6 million, or 58.3%, as compared to $19.8 million during the three months ended September 30, 2020. For the six months ended September 30, 2021, net earnings were $54.9 million, an increase of $17.7 million, or 47.6%, as compared to $37.2 million for the same period in the prior year.

Basic and fully diluted earnings per common share was $2.36 and $2.34, respectively, for the three months ended September 30, 2021, an increase of 59.5% and 58.1% as compared to $1.48 for both basic and fully diluted earnings per common share, for the three months ended September 30, 2020. For the six months ended September 30, 2021, basic and fully diluted earnings per common share were $4.12 and $4.09, an increase of 47.7% and 47.1%, as compared to $2.79 and $2.78, respectively, for the same period in the prior year.

Non-GAAP diluted earnings per share increased 54.2% to $2.59 for the three months ended September 30, 2021, as compared to $1.68 for the three months ended September 30, 2020. Non-GAAP diluted earnings per share increased 42.6% to $4.55 for the six months ended September 30, 2021, as compared to $3.19 for the six months ended September 30, 2020.

Weighted average common shares outstanding was 13.3 million in the calculation of basic earnings per common share for both the three- and six-months ending September 30, 2021 and 13.4 million in the calculation of diluted earnings per common share for both the three- and six-months ending September 30, 2021. Weighted average common shares outstanding was 13.4 million and 13.3 in the calculation of basic earnings per common share for the three- and six-months ending September 30, 2020, respectively, and 13.4 million in the calculation of diluted earnings per common share for both the three- and six-months ending September 30, 2020.

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LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY OVERVIEW

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

Throughout the current fiscal year and until October 12, 2021, ePlus Technology, inc. and certain of its subsidiaries (the “Borrowers”), which are part of our technology segment, financed their operations, in addition to funds generated from operations, with a credit facility with WFCDF. This facility provided short-term capital for our technology segment. There were two components of the WFCDF credit facility: (1) a floor plan component, and (2) an accounts receivable component.

On October 13, 2021, we entered into a First Amended and Restated Credit Agreement by and among the Borrowers, WFCDF, as administrative agent thereunder, various banks and other financial institutions (including WFCDF) who are parties thereto as lenders (collectively, the “Lenders”) and others, pursuant to which, among other things, the Lenders established for the benefit of the Borrowers a discretionary senior secured floorplan facility in the aggregate principal amount of up to $375 million, together with a sublimit for a revolving credit facility for up to $100 million (collectively, the “2021 Credit Facility”).

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

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

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

CASH FLOWS

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

	Six Months Ended September 30,
	2021			2020
Net cash provided by (used in) operating activities	$	(135,004	)	$	8,408
Net cash used in investing activities		(13,690	)		(2,811	)
Net cash provided by financing activities		75,782			69,730
Effect of exchange rate changes on cash		300			(477	)
Net increase (decrease) in cash and cash equivalents	$	(72,612	)	$	74,850

Cash flows from operating activities: We used $135.0 million in operating activities during the six months ended September 30, 2021, compared to $8.4 million provided by operating activities for the six months ended September 30, 2020. See below for a breakdown of operating cash flows by segment (in thousands):

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	Six Months Ended September 30,
	2021			2020
Technology segment	$	(127,361	)	$	44,367
Financing segment		(7,643	)		(35,959	)
Net cash provided by (used in) operating activities	$	(135,004	)	$	8,408

Technology segment: In the six months ended September 30, 2021, our technology segment used $127.4 million from operating activities primarily due to increases in our accounts receivable and inventories and a decrease in accounts payable-trade. Offsetting this, we had net borrowing on the floor plan component of our credit facility of $47.2 million. We use this facility to manage working capital needs. We present changes in this balance as financing activity in our consolidated statement of cash flows.

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

To manage our working capital, we monitor our cash conversion cycle for our technology segment, which is defined as days sales outstanding (“DSO”) in accounts receivable plus days of supply in inventory (“DIO”) minus days of purchases outstanding in accounts payable (“DPO”).

The following table presents the components of the cash conversion cycle for our technology segment:

	As of September 30,
	2021			2020
(DSO) Days sales outstanding (1)		64			61
(DIO) Days inventory outstanding (2)		18			14
(DPO) Days payable outstanding (3)		(47	)		(54	)
Cash conversion cycle		35			21

(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.

Our cash conversion cycle increased to 35 days at September 30, 2021, compared to 21 days at September 30, 2020. Our standard payment term for customers is between 30-60 days; however, certain customer orders may be approved for extended payment terms. Our DPO decreased 7 days. Invoices processed through our credit facility, or the A/P-floor plan balance, are typically paid within 45-60 days from the invoice date, while A/P trade invoices are typically paid within 30 days from the invoice date. Our DSO increased to 64 days, which reflects higher sales to customers with terms greater than or equal to net 60 days for the period ended September 30, 2021, including sales to one of our larger customers related to ongoing projects, as compared to the same period in the prior year. Our DIO increased to 18 days due to higher inventory balance. Inventory, which represents equipment ordered by customers but not yet delivered, increased 92.3% to $134.5 million as of September 30, 2021, from $70.0 million as of March 31, 2021, partially due to ongoing projects with the same large customer.

Financing segment: In the six months ended September 30, 2021, our financing segment used $7.6 million from operating activities, primarily due to increases in accounts receivable of $9.8 million and financing receivables-net of $19.3 million, offset by net earnings. In the six months ended September 30, 2020, our financing segment used $36.0 million from operating activities, primarily due to changes in financing receivables- net of $54.4 million, partially offset by earnings and an increase in accounts payable trade of $13.0 million.

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Cash flows related to investing activities: In the six months ended September 30, 2021, we used $13.7 million from investing activities, consisting of $16.2 million for purchases of property, equipment and operating lease equipment offset by $2.6 million of proceeds from the sale of property, equipment, and operating lease equipment. In the six months ended September 30, 2020, we used $2.8 million from investing activities, consisting of $3.3 million for purchases of property, equipment and operating lease equipment offset by $0.5 million of proceeds from the sale of property, equipment, and operating lease equipment.

Cash flows from financing activities: In the six months ended September 30, 2021, cash provided by financing activities was $75.8 million, consisting of net borrowings on the floor plan component of our credit facility of $47.2 million and net repayments of non-recourse and recourse notes payable of $35.4 million, partially offset by $6.9 million in cash used to repurchase outstanding shares of our common stock. In the six months ended September 30, 2020, cash provided by financing activities was $69.7 million consisting of net borrowings on floor plan facility of $91.6 million, net borrowings of non-recourse and recourse notes payable of $18.1 million, which was partially offset by repayment of $35.0 million in borrowings under the accounts receivable component of our Technology segment credit facility and $4.5 million in repurchase of common stock.

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

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

SECURED BORROWINGS – FINANCING SEGMENT

We may finance all or most of the cost of the assets that we finance for customers by transferring all or part of the contractual payments due to us to third-party financing institutions. When we account for the transfer as a secured borrowing, we recognize the proceeds as either recourse or non-recourse notes payable. Our customers are responsible for repaying the debt from a secured borrowing. The lender typically secures a lien on the financed assets at the time the financial assets are transferred and releases it upon collecting all the transferred payments. We are not liable for the repayment of non-recourse loans unless we breach our representations and warranties in the loan agreements. The lender assumes the credit risk and their only recourse, upon default by the customer, is against the customer and the specific equipment under lease. While we expect that the credit quality of our financing arrangements and our residual return history will continue to allow us to obtain such financing, such financing may not be available on acceptable terms, or at all.

CREDIT FACILITY – TECHNOLOGY SEGMENT

Throughout the current fiscal year and until October 12, 2021, our technology segment financed its operations, in addition to funds generated from operations, with a credit facility with WFCDF. This facility provided short-term capital for our technology segment. There were two components of the WFCDF credit facility: (1) a floor plan component and (2) an accounts receivable component.

Under the WFCDF credit facility, there was an aggregate limit for the two components, except during a temporary uplift, of $275 million. We could elect to temporarily increase the aggregate limit to $350 million for a period of not less than 30 days, provided that all such periods not exceed 150 days in the aggregate in any calendar year. Additionally, the WFCDF credit facility had a limit on the accounts receivable component of $100 million. WFCDF charged 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 September 30, 2021, the limit of the two components of the credit facility was $350 million as result of our election to temporarily uplift the aggregate limit.

The WFCDF credit facility was secured by the assets of the Borrowers. Additionally, the credit facility required a guaranty of $10.5 million by ePlus inc.

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The WFCDF credit facility restricted the ability of the Borrowers to pay dividends to ePlus inc. unless their available borrowing met certain thresholds. As of September 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 required that financial statements of the Borrowers be provided within 45 days of each quarter and 90 days of each fiscal year end and required that other operational reports be provided on a regular basis. Either party could terminate with 90 days’ advance written notice.

On October 13, 2021, we entered the 2021 Credit Facility by and among the Borrowers, WFCDF, as administrative agent thereunder, and the Lenders. The Lenders under this facility established for the benefit of the Borrowers a discretionary senior secured floorplan facility in the aggregate principal amount of up to $375 million, together with a sublimit for a revolving credit facility for up to $100 million. Loans under this credit agreement will accrue interest at a rate per annum equal to LIBOR plus 1.75%. This new credit agreement replaced the existing credit facility effective October 13, 2021.

The loss of the 2021 Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology segment and as an operational function of our accounts payable process.

Floor plan component: After a customer places a purchase order with us and after we have completed our credit review of the customer, we place an order for the equipment with one of our vendors. Generally, most purchase orders from us to our vendors are first financed under the floor plan component and reflected in “accounts payable—floor plan” in our consolidated balance sheets. Payments on the floor plan component are due on three specified dates each month, generally 30-60 days from the invoice date. Most customer payments in our technology segment are remitted to our lockboxes. Once payments are cleared, the monies in the lockbox accounts are automatically and daily transferred to our operating account. On the due dates of the floor plan component, we make cash payments to WFCDF. Our borrowings and repayments under the floor plan component are included in “net borrowings (repayments) on floor plan facility” within cash flows from the financing activities in our consolidated statements of cash flows.

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

Maximum Credit Limit at September 30, 2021		Balance as of September 30, 2021		Maximum Credit Limit at March 31, 2021		Balance as of March 31, 2021
$	350,000	$	145,880	$	275,000	$	98,653

Accounts receivable component: We have an accounts receivable component included within the WFCDF credit facility, which has a revolving line of credit. The outstanding balance under the accounts receivable component is presented as part of as recourse notes payable- current on our consolidated balance sheets. Our borrowings and repayments under the accounts receivable component are included in “borrowings of non-recourse and recourse notes payable” and “repayments of non-recourse and recourse notes payable,” respectively, within cash flows from the financing activities in our consolidated statements of cash flows.

As of September 30, 2021, there was an outstanding balance for the accounts receivable component of $29.0 million. We did not have any outstanding balance under the accounts receivable component of the WFCDF credit facility as of either the period ended March 31, 2021, or September 30, 2020. The maximum credit limit under this facility was $100.0 million.

PERFORMANCE GUARANTEES

In the normal course of business, we may provide certain customers with performance guarantees, which are generally backed by surety bonds. In general, we would only be liable for these guarantees in the event of default in the performance of our obligations. We are in compliance with material performance obligations under all service contracts for which there is a performance guarantee, and we believe that any liability incurred in connection with these guarantees would not have a material adverse effect on our consolidated statements of operations.

OFF-BALANCE SHEET ARRANGEMENTS

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K, or other contractually narrow or limited purposes. As of September 30, 2021, we were not involved in any unconsolidated special purpose entity transactions.

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ADEQUACY OF CAPITAL RESOURCES

The continued implementation of our business strategy will require a significant investment in both resources and managerial focus. In addition, we may selectively acquire other companies that have attractive customer relationships and skilled sales and/or engineering forces. We may also open offices in new geographic areas, which may require a significant investment of cash. We may also acquire technology companies to expand and enhance the platform of bundled solutions to provide additional functionality and value-added services. We may continue to use our internally generated funds to finance investments in leased assets or investments in notes receivables due from our customers. These actions may result in increased working capital needs as the business expands. As a result, we may require additional financing to fund our strategy, implementation, potential future acquisitions, and working capital needs, which may include additional debt and equity financing. The impacts of COVID-19 may limit or eliminate our access to capital. While the future is uncertain, we do not believe our credit facility will be terminated by WFCDF or us. Additionally, while our lending partners in our financing segment have become more discerning in their approval processes, we currently have funding resources available for our transactions.

INFLATION

For the periods presented herein, inflation has not had a material effect on our results of operations. In the most recent quarter, we have experienced some increases in prices from our suppliers as well as rising wages. We generally have been able to pass along these price increases to our customers. There can be no assurances, however, that inflation would not have a material impact on our sales or operating costs in the future.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

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

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to the worldwide impacts from COVID-19, currency fluctuations, reduction in IT spending, shortages of product from our vendors due to material shortages, any reduction of expected residual values related to the equipment under our leases, the timing and mix of specific transactions, the reduction of manufacturer incentive programs, and other factors. Quarterly operating results could also fluctuate as a result of our sale of equipment in our lease portfolio to a lessee or third-party at the expiration of a lease term or prior to such expiration, and the transfer of financial assets. Sales of equipment and transfers of financial assets may have the effect of increasing revenues and net income during the quarter in which the sale occurs and reducing revenues and net income otherwise expected in subsequent quarters. See Part I, Item 1A, “Risk Factors,” in our 2021 Annual Report, as supplemented in subsequently filed reports, and in Part II, Item 1A. “Risk Factors” in this Report.

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Although a substantial portion of our liabilities are non-recourse, fixed-interest-rate instruments, we utilize lines of credit and other financing facilities that are subject to fluctuations in short-term interest rates. Our non-recourse instruments, which are denominated in US dollars, were entered for other than trading purposes and bear interest at a fixed rate. Because the interest rate on these instruments is fixed, changes in interest rates will not directly impact our cash flows. Financing transactions funded with our cash flows, not debt, and may be subject to interest rate risk. If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds. Borrowings under the WFCDF credit facility bear interest at a market-based variable rate. As of September 30, 2021, the aggregate fair value of our recourse and non-recourse borrowings approximated their carrying value.

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

We evaluate developments related to the UK leaving the European Union on a regular basis to determine if such developments will have a material impact on our results on operations and financial position. Our assessment is that foreign currency exposure for our UK operations is insignificant in relation to total consolidated operations, and we believe those potential fluctuations in currency exchange rates and other economic and operational risks will not have a material effect on our results of operations and financial position.

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

Item 4.  CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” as defined in the Exchange Act Rule 13a-15(e). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2021.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting during the quarter ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LIMITATIONS AND EFFECTIVENESS OF CONTROLS

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

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Please refer to Note 9, “Commitment and Contingencies” to the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements”.

Item 1A.  RISK FACTORS

There has not been any material change in the risk factors disclosed in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, as supplemented in Part II, Item 1A of our Quarterly Report for the period ended June 30, 2021.

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information regarding our total purchases of 76,743 shares of ePlus inc. common stock during the six months ended September 30, 2021, including a total of 49,028 shares purchased as part of the publicly announced share repurchase plans or programs.

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	)
July 1, 2021 through July 31, 2021		31,399	$	87.99		31,399		450,972	(6	)
August 1, 2021 through August 31, 2021		-	$	-		-		450,972	(7	)
September 1, 2021 through September 30, 2021		-	$	-		-		450,972	(8	)

(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.

(6) The share purchase authorization in place for the month ended July 31, 2021, had purchase limitations on the number of shares of up to 500,000 shares. As of July 31, 2021, the remaining authorized shares to be purchased were 450,972.

(7) The share purchase authorization in place for the month ended August 31, 2021, had purchase limitations on the number of shares of up to 500,000 shares. As of August 31, 2021, the remaining authorized shares to be purchased were 450,972.

(8) The share purchase authorization in place for the month ended September 30, 2021, had purchase limitations on the number of shares of up to 500,000 shares. As of September 30, 2021, the remaining authorized shares to be purchased were 450,972.

The timing and expiration date of the current stock repurchase authorizations are included in Note 11, “Stockholders’ Equity” to our unaudited consolidated financial statements included elsewhere in this report.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

Item 4.  MINE SAFETY DISCLOSURES

Not Applicable.

Item 5.  OTHER INFORMATION

None.

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Item 6. EXHIBITS

Exhibit Number	Exhibit Description
3.1	ePlus inc. Amended and Restated Certificate of Incorporation as amended September 15, 2008 (Incorporated herein by reference as Exhibit 3.1 to our Current Report on Form 8-K filed on September 19, 2008).
3.2	Amended and Restated Bylaws of ePlus inc., as of September 1, 2021.
10.1	ePlus 2021 Employee Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 23, 2021).
10.2	First Amended and Restated Credit Agreement, dated as of October 13, 2021, by and among ePlus Technology, inc., ePlus Technology Services, inc., SLAIT Consulting, LLC, certain of ePlus inc. subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto (Incorporated herein by reference to Exhibit 10.1 to our Current Report in Form 8-K filed on October 19, 2021).
10.3	Guaranty and Security Agreement, dated as of October 13, 2021, by and among ePlus Technology, inc., ePlus Technology Services, inc., SLAIT Consulting, LLC, certain future subsidiaries of ePlus inc., as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 19, 2021).
10.4	First Amended and Restated Collateralized Guaranty, dated as of October 13, 2021, by and among ePlus Group, inc. and Wells Fargo Commercial Distribution Finance, LLC as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on October 19, 2021).
10.5	First Amended and Restated Limited Guaranty, dated as of October 13, 2021, by and between ePlus inc. and Wells Fargo Commercial Distribution Finance, LLC as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2021).
31.1	Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
31.2	Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).
32	Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

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SIGNATURES

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

	ePlus inc.
Date:  November 9, 2021	/s/ MARK P. MARRON
	By: Mark P. Marron
	Chief Executive Officer and President
	(Principal Executive Officer)
Date:  November 9, 2021	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

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EX-3.2

Exhibit 3.2

EPLUS INC.

A DELAWARE CORPORATION

AMENDED AND RESTATED BYLAWS

(Amended and restated on September 1, 2021)

ARTICLE I: OFFICES

SECTION 1.1 Registered Office. The Corporation shall maintain a registered office and agent in the State of Delaware if and as required by law.

SECTION 1.2 Principal Office. The principal office for the transaction of the business of the Corporation shall be at such place as the Board of Directors of the Corporation (the “Board”) may determine. The Board is hereby granted full power and authority to change said principal office from one location to another.

SECTION 1.3 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require.

ARTICLE II: MEETINGS OF STOCKHOLDERS

SECTION 2.1 Place of Meetings. All annual meetings of stockholders and all other meetings of stockholders shall be held either at the principal office of the Corporation or at any other place within or without the State of Delaware that may be designated by the Board pursuant to authority hereinafter granted to the Board.

SECTION 2.2 Annual Meetings. Annual meetings of stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time and place and on such date as the Board shall determine by resolution, or in such other manner as the directors may direct.

SECTION 2.3 Special Meetings.

(A) A special meeting of the stockholders for the transaction of any proper business may be called at any time by the Board, the Chairman of the Board, the President or the Executive Vice President.

(B) A special meeting of the stockholders shall be called by the Board upon the written request, submitted to the Secretary of the Corporation, of stockholders collectively holding twenty-five percent 25% or more of the then outstanding shares of the Corporation’s common stock. A request to the Secretary of the Corporation shall be signed by each stockholder, or a duly authorized agent of such stockholder, requesting the special meeting and shall set forth the information required to be included in a notice to the Corporation pursuant to Section 2.8(A) or 2.8(B) of these Bylaws, as applicable. A special meeting requested by stockholders shall be held at such date, time and place within or without the state of Delaware as may be fixed by the Board; provided, however, that the date of any such special meeting shall be not more than 90 days after the request to call the special meeting is received by the Secretary of the Corporation. Notwithstanding the foregoing, a special meeting requested by stockholders shall not be held if the Board has called or calls for an annual meeting of stockholders to be held within 90 days after the Secretary of the Corporation receives the request for the special meeting and the Board determines in good faith that the business of such annual meeting includes (among any other matters properly brought before the annual meeting) the business specified in the request. A stockholder may revoke a request for a special meeting at any time by written revocation delivered to the Secretary of the Corporation, and if, following such revocation, there are un-revoked requests from stockholders holding in the aggregate less than the requisite number of shares entitling the stockholders to request the calling of a special meeting, the Board, in its discretion, may cancel the special meeting.

(C) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting.

SECTION 2.4 Notice of Meetings. Notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 days nor more than 60 days before the date of the meeting to each stockholder of record entitled to vote at such meeting and in compliance with the provisions of Delaware law. Except as otherwise expressly required by law, no publication of any notice of a meeting of stockholders shall be required. Every notice of a meeting of stockholders shall state the place, date and hour of the meeting and, in the case of a special meeting shall also state the purpose for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder to whom notice may be omitted pursuant to applicable Delaware law or who shall have waived such notice, and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.

SECTION 2.5 Quorum. Except as otherwise required by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of stockholders of the Corporation or any adjournment thereof. Subject to the requirement of a larger percentage vote, if any, contained in the Certificate of Incorporation, these Bylaws or by statute, the stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding any withdrawal of stockholders that may leave less than a quorum remaining, if any action taken (other than adjournment) is approved by the vote of at least a majority in voting interest of the shares required to constitute a quorum. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally called.

SECTION 2.6 Voting.

(A) Each stockholder shall, at each meeting of stockholders, be entitled to vote in person or by proxy each share of the stock of the Corporation that has voting rights on the matter in question and that shall have been held by such stockholder and registered in such stockholder’s name on the books of the Corporation:

(i) on the date fixed pursuant to Section 6.5 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting; or

(ii) if no such record date shall have been so fixed, than (a) at the close of business on the day next preceding the day upon which notice of the meeting shall be given or (b) if notice of the meeting shall be waived, at the close of business on the day next preceding the day upon which the meeting shall be held.

(B) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation the pledgor shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or the pledgee’s proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (the “Delaware General Corporation Law”).

(C) Subject to the provisions of the Corporation’s Certificate of Incorporation, any such voting rights may be exercised by the stockholder entitled thereto in person or by such stockholder’s proxy appointed by an instrument in writing, subscribed by such stockholder or by such stockholder’s attorney thereunto authorized and delivered to the secretary of the meeting. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless such stockholder shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of stockholders at which a quorum is present, all matters, except as otherwise provided in the Certificate of Incorporation, in these Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon. The vote at any meeting of stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by such stockholder’s proxy, if there be such proxy, and it shall state the number of shares voted.

SECTION 2.7 Judges. Prior to each meeting of stockholders, the Chairman of such meeting shall appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a judge at such meeting with strict impartiality and according to the best of such judge’s ability. Such judges shall decide upon the qualification of the voters and shall certify and report the number of shares represented at the meeting and entitled to vote on such question, determine the number of votes entitled to be cast by each share, shall conduct and accept the votes, when the voting is completed, ascertain and report the number of shares voted respectively for and against the question, and determine, and retain for a reasonable period a record of the disposition of any challenge made to any determination made by such judges. Reports of judges shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may be a judge on any question other than a vote for or against a proposal in which such officer shall have a material interest. The judges may appoint or retain other persons or entities to assist the judges in the performance of the duties of the judges.

SECTION 2.8 Advance Notice of Stockholder Proposals and Stockholder Nominations.

(A) At any annual meeting of the stockholders nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation who complies with the notice procedures set forth in this Section 2.8. For any nominations or other business to be properly brought before any annual meeting of the stockholders by a stockholder, the stockholder must have given notice thereof in writing to the Secretary of the Corporation: (1) not later than 60 days in advance of the first anniversary of the previous year’s annual meeting if such meeting is to be held on a day which is within 30 days of the anniversary of the previous year’s annual meeting; and (2) with respect to any other annual meeting of stockholders, not later than the close of business on the seventh day following the date of public announcement of such meeting. For business proposals other than nominations, for which a notice must comply with requirements of Section 2.8(B), a stockholder’s notice to the Secretary shall set forth (1) as to each matter the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (2) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business, (3) the class and number of shares of the Corporation that are beneficially owned by the stockholder, and (4) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock) has been made, the effect or intent of which is to mitigate loss to or manage risk of stock price changes for, or to increase the voting power of, such stockholder or any of its affiliates with respect to any share of stock of the Corporation, (5) as to each matter the stockholder proposes to bring before the meeting, any material interest of the stockholder in such business. In addition, the stockholder making such proposal shall promptly provide any other information reasonably requested by the Corporation. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any meeting of the stockholders except in accordance with the procedures set forth in this Section 2.8. The Chairman of any such meeting shall direct that any business not properly brought before the meeting shall not be considered. Notwithstanding the foregoing provisions of this Section 2.8, a stockholder seeking to include a proposal in a proxy statement that has been prepared by the Corporation to solicit proxies shall comply with the requirements in the proxy rules of the United States Securities and Exchange Commission with respect to such proposal.

(B) A stockholder may nominate a person for election as a director at a special meeting only if the nominee is named in the special meeting request delivered pursuant to Section 2.3(B) of these Bylaws. For nominations of any person to be elected as a director, a stockholder’s notice to the Secretary shall set forth: (i) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting and nominate the person or persons specified in the notice; (iii) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock) has been made, the effect or intent of which is to mitigate loss to or manage risk of stock price changes for, or to increase the voting power of, such stockholder or any of its affiliates with respect to any share of stock of the Corporation (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (v) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the United States Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, by the Board; and (vi) the consent of each nominee to serve as a director of the Corporation if so elected. In addition, the stockholder making such nomination shall promptly provide any other information reasonably requested by the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.8. The chairman of any meeting of stockholders shall direct that any nomination not made in accordance with these procedures be disregarded.

(C) For purposes of this Section 2.8, a “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission.

SECTION 2.9 Action Without Meeting. Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may, if such action has been approved by the Board of Directors, be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III: BOARD OF DIRECTORS

SECTION 3.1 General Powers. Subject to any requirements in the Certificate of Incorporation, these Bylaws, and of the Delaware General Corporation Law as to action which must be authorized or approved by the stockholders, any and all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be under the direction of, the Board to the fullest extent permitted by law. Without limiting the generality of the foregoing, it is hereby expressly declared that the Board shall have the following powers, to wit:

(A) To select and remove all the officers, agents and employees of the Corporation, prescribe such powers and duties for them as may not be inconsistent with law, the Certificate of Incorporation or these Bylaws, fix their compensation, and require from them security for faithful service;

(B) To conduct, manage and control the affairs and business of the Corporation, and to make such rules and regulations therefore not inconsistent with law, the Certificate of Incorporation or these Bylaws, as it may deem best;

(C) To change the principal office and the principal office for the transaction of the business of the Corporation from one location to another as provided in Section 1.2 hereof; to fix and locate from time to time one or more subsidiary offices of the Corporation within or without the State of Delaware as provided in Section 1.3 hereof; to designate any place within or without the State of Delaware for the holding of any meeting or meetings of stockholders; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and of such certificates from time to time, and in its judgment as it may deem best, provided such seal and such certificate shall at all times comply with the provisions of law;

(D) To authorize the issuance of shares of stock of the Corporation from time to time, upon such terms and for such considerations as may be lawful;

(E) To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust and securities therefor;

(F) To fill vacancies on the Board as provided in Section 3.5 hereof; and

(G) By resolution adopted by a majority of the whole Board to designate an executive and other committees of the Board, each consisting of one or more directors, to serve at the pleasure of the Board, and to prescribe the manner in which proceedings of such committee or committees shall be conducted.

SECTION 3.2 Number and Term of Office

(A) The number of directors of the Corporation shall be fixed from time to time by resolution adopted by affirmative vote of a majority of such directors then in office.Each of the directors of the corporation shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided.

(B) All directors shall serve for a term ending at the annual meeting following the annual meeting at which the director was elected, and until his or her successor is elected and qualified.

SECTION 3.3 Election of Directors. The directors shall be elected by the stockholders of the Corporation, and at each election, the persons receiving the greater number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provision contained in the Certificate of Incorporation relating thereto, including any provision regarding the rights of holders of preferred stock to elect directors.

SECTION 3.4 Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 3.5 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, removal, or any other cause, shall be filled by vote of the majority of the remaining directors, although less than a quorum. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

SECTION 3.6 Place of Meeting. The Board or any committee thereof may hold any of its meetings at such place or places within or without the State of Delaware as the Board or such committee may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board or any committee thereof by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board or such committee can hear each other, and such participation shall constitute presence in person at such meeting.

SECTION 3.7 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given.

SECTION 3.8 Special Meetings. Special meetings of the Board for any purpose or purposes shall be called at any time by the Chairman of the Board or, if the Chairman of the Board is absent or unable or refuses to act, by the Chief Executive Officer, the President or the Executive Vice President, and may also be called by any two members of the Board. Except as otherwise provided by law or by these Bylaws, written notice of the time and place of special meetings shall be delivered personally, by email or by facsimile to each director, or sent to each director by mail or by other form of written communication, charges prepaid, addressed to such director at such director’s address as it is shown upon the records of the Corporation, or, if it is not so shown on such records and is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed, it shall be deposited in the United States mail in the county in which the principal office for the transaction of the business of the Corporation is located at least 48 hours prior to the time of the holding of the meeting. In case such notice is delivered personally, by email or by facsimile as above provided, it shall be delivered at least 24 hours prior to the time of the holding of the meeting. Such mailing, delivery, email or facsimile transmission as above provided shall be due, legal and personal notice to such director. Except where otherwise required by law or by these Bylaws, notice of the purpose of a special meeting need not be given. Notice of any meeting of the Board shall not be required to be given to any director who is present at such meeting, except a director who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

SECTION 3.9 Quorum and Manner of Acting. Except as otherwise provided in these Bylaws, the Certificate of Incorporation or by applicable law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, provided any action taken is approved by at least a majority of the required quorum for such meeting. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. Notwithstanding the foregoing to the contrary, in the event of the existence of two or more vacancies of the Board of Directors, a minimum of two (2) directors shall constitute a quorum to transact any business of the Board.

Notwithstanding the provisions set forth above, without the prior consent of the Board, the Corporation shall not, and shall not cause any of its subsidiaries to:

(A) [RESERVED]

(B) [RESERVED]

(C) except in the Ordinary Course of Business, sell, lease or otherwise dispose of or permit any subsidiary to sell, lease or otherwise dispose of, more than 20% of the consolidated assets of the Corporation and its subsidiaries (computed on the basis of book value, determined in accordance with generally accepted accounting principles consistently applied, or fair market value, determined by the Board in its reasonable good faith judgment) in any transaction or series of related transactions.

SECTION 3.10 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if consent in writing is given thereto by all members of the Board or of such committee, as the case may be, and such consent is filed with the minutes of proceedings of the Board or of such committee.

SECTION 3.11 Compensation. Directors, whether or not employees of the Corporation or any of its subsidiaries, may receive an annual fee for their services as directors in an amount fixed by resolution of the Board plus other compensation, including options to acquire capital stock of the Corporation, in an amount and of a type fixed by resolution of the Board, and, in addition, a fixed fee, with or without expenses of attendance, may be allowed by resolution of the Board for attendance at each meeting, including each meeting of a committee of the Board. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation therefor.

SECTION 3.12 Committees. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, including, without limitation, an audit committee, a nominating and corporate governance committee, and a compensation committee. Each committee is to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the Board and subject to any restrictions or limitation on the delegation of power and authority imposed by applicable law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. Unless the Board or these Bylaws shall otherwise prescribe the manner of proceedings of any such committee, meetings of such committee may be regularly scheduled in advance and may be called at any time by the chairman of the committee or by any two members thereof; otherwise, the provisions of these Bylaws with respect to notice and conduct of meetings of the Board shall govern.

SECTION 3.13 Affiliated Transactions. Notwithstanding any other provisions of these Bylaws, each transaction, or, if an individual transaction constitutes a part of a series of transactions, each series of transactions, proposed to be entered into between the Corporation, on the one hand, or any person affiliated with the Corporation, on the other hand, must be approved by a majority of the independent directors.

SECTION 3.14 Chairman of the Board. The chairman of the Board shall preside at all meetings of stockholders and at all meetings of the Board. The Chairman shall exercise and perform such powers and duties with respect to the business and affairs of the Corporation as may be assigned to the Chairman by the Board or such other powers and duties as may be prescribed by the Board or these Bylaws.

ARTICLE IV: OFFICERS

SECTION 4.1 Officers. The officers of the Corporation shall be a Chief Executive Officer, a President, one or more Vice Presidents (the number thereof and their respective titles to be determined by the Board), a Secretary, and such other officers as may be appointed at the discretion of the Board in accordance with the provisions of Section 4.3 hereof. Any two or more offices may be held by the same person, except the offices of President and Secretary.

SECTION 4.2 Election. The officers of the Corporation, except such officers as may be appointed or elected in accordance with the provisions of Sections 4.3 or 4.5 hereof, shall be chosen annually by the Board at the first meeting thereof after the annual meeting of stockholders, and each officer shall hold office until such officer shall resign or shall be removed or otherwise disqualified to serve, or until such officer’s successor shall be elected and qualified.

SECTION 4.3 Other Officers. In addition to the officers chosen annually by the Board at its first meeting, the Board also may appoint or elect such other officers as the business of the Corporation may require, each of whom shall have such authority and perform such duties as are provided in these Bylaws or as the Board may from time to time specify, and shall hold office until such officer shall resign or shall be removed or otherwise disqualified to serve, or until such officer’s successor shall be elected and qualified.

SECTION 4.4 Removal and Resignation. Any officer may be removed, either with or without cause, by resolution of the Board, at any regular or special meeting of the Board, or except in case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board. Any officer or assistant may resign at any time by giving written notice of his resignation to the Board or the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, upon receipt thereof by the board or the Secretary, as the case may be; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 4.5 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to such office.

SECTION 4.6 [RESERVED]

SECTION 4.7 Chief Executive Officer. The Chief Executive officer shall exercise and perform such powers and duties with respect to the administration of the business and affairs of the Corporation as may from time to time be assigned to the Chief Executive Officer by the Board, or as may be prescribed by these Bylaws.

SECTION 4.8 President. The President shall exercise and perform such powers and duties with respect to the administration of the business and affairs of the Corporation as may from time to time be assigned to the President by the Board, or as may be prescribed by these Bylaws. In the absence or disability of the Chief Executive Officer, or in the event and during the period of a vacancy in the office of Chief Executive Officer, the President shall perform all the duties of the Chief Executive Officer, and when so acting shall have all of the powers of, and be subject to all the restrictions upon, the Chief Executive Officer.

SECTION 4.9 Vice Presidents. The Vice Presidents shall have such powers and perform such duties with respect to the administration of the business and affairs of the Corporation as may from time to time be assigned to such Vice President by the Board, or the President or as may be prescribed by these Bylaws.

SECTION 4.10 Secretary.

(A) The Secretary shall keep, or cause to be kept, at the principal office of the Corporation or such other place as the Board may order, a book of minutes of all meetings of directors and stockholders, with the time and place of holding, whether regular or special, and if special, how authorized and the notice thereof given, the names of those present at meetings of directors, the number of shares present or represented at meetings of stockholders, and the proceedings thereof.

(B) The Secretary shall keep, or cause to be kept, at the principal office of the Corporation’s transfer agent, a share register, or a duplicate share register, showing the name of each stockholder, the number of shares of each class held by such stockholder, the number and date of certificates issued for such shares, and the number and date of cancellation of every certificate surrendered for cancellation.

ARTICLE V: CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 5.1          Execution of Contracts. The Board, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by these Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount.

SECTION 5.2 Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such officer, assistant, agent or attorney shall give such bond, if any, as the Board may require.

SECTION 5.3 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice President (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation.

SECTION 5.4 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.

ARTICLE VI: SHARES AND THEIR TRANSFER

SECTION 6.1 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, including without limitation a book entry system, certifying the number and class or series of shares of the stock of the Corporation owned by such owner. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairman of the Board, the Chief Executive Officer, the President or an Executive Vice President, and by the Secretary or Assistant Secretary. Any or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any such certificate, shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such an officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class or series of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.4 hereof.

SECTION 6.2 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by such holder’s attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.3 hereof, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

SECTION 6.3 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.

SECTION 6.4 Lost, Stolen, Destroyed, and Mutilated Certificates. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do.

SECTION 6.5 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action other than to consent to corporate action in writing without a meeting, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any such other action. If in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders the Board shall not fix such a record date, then the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

ARTICLE VII: INDEMNIFICATION

SECTION 7.1 Indemnification of Directors and Officers. The Corporation shall indemnify, in the manner and to the fullest extent permitted by the Delaware General Corporation Law (and in the case of any amendment thereto, to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), any person (or the estate of any person) who is or was a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise. The Corporation may, to the fullest extent permitted by the Delaware General Corporation Law, purchase and maintain insurance on behalf of any such person against any liability which may be asserted against such person. The Corporation may create a trust fund, grant a security interest or use other means (including without limitation a letter of credit) to ensure the payment of such sums as may become necessary to effect the indemnification as provided herein. To the fullest extent permitted by the Delaware General Corporation Law, the indemnification provided herein shall include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement and any such expenses shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the indemnitee to repay such amounts if it is ultimately determined that he or she is not entitled to be indemnified. The indemnification provided herein shall not be deemed to limit the right of the Corporation to indemnify any other person for any such expenses to the fullest extent permitted by the Delaware General Corporation Law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Corporation may be entitled under any agreement, the Corporation’s Certificate of Incorporation, vote of stockholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in other capacity while holding such office.

SECTION 7.2 Indemnification of Employees and Agents. The Corporation may, but only to the extent that the Board of Directors may (but shall not be obligated to) authorize from time to time, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VII as they apply to the indemnification and advancement of expenses of directors and officers of the Corporation.

SECTION 7.3 Enforcement of Indemnification. This right to indemnification and the advancement of expenses conferred above shall be contract rights. If a claim under this ARTICLE VII is not paid in full by the Corporation within 60 days after written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expenses of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VII or otherwise shall be on the Corporation.

ARTICLE VIII: MISCELLANEOUS

SECTION 8.1 Seal. The Board shall adopt a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words showing that the Corporation was incorporated in the State of Delaware.

SECTION 8.2 Waiver of Notices. Whenever notice is required to be given by these Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice.

SECTION 8.3 Amendments. Except as otherwise provided herein or in the Certificate of Incorporation, these Bylaws or any of them may be altered, amended, repealed or rescinded and new Bylaws may be adopted by affirmative vote of a majority of the Board or by affirmative vote of a majority of the outstanding shares of the corporation’s voting stock at any annual or special meeting of stockholders, provided that notice of such proposed alteration, amendment, repeal, recession or adoption is given in the notice of such meeting.

SECTION 8.4 Representation of Other Corporations. The Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice President or the Secretary or any Vice President of the Corporation is authorized to vote, represent and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation, other than a corporation of which the Corporation owns twenty percent (20%) or more of its capital stock, in which case such officers shall not be so authorized under these Bylaws without the authorization of the Board. The authority herein granted to said officers to vote or represent on behalf of the Corporation any and all shares held by the Corporation in any other corporation or corporations may be exercised either by such officers in person or by any person authorized so to do by proxy or power of attorney duly executed by such officers.

SECTION 8.05 Exclusive Forum for Certain Disputes: Unless the Corporation consents in writing to the selection of an alternative forum, subject to the court’s having personal jurisdiction over the indispensable parties named as defendants, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court or federal court located within the state of Delaware), shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the Corporation’s shareholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, or the Corporation’s certificate of incorporation or bylaws (as either may be amended from time to time), and (4) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 8.05.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Mark P. Marron, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:  November 9, 2021

/s/ MARK P. MARRON

Mark P. Marron

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elaine D. Marion, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:  November 9, 2021

/s/ ELAINE D. MARION

Elaine D. Marion

Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 USC. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ePlus inc. on Form 10-Q for the quarter ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to 18 USC. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned's best knowledge and belief:

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

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

Date:  November 9, 2021

/s/ MARK P. MARRON

Mark P. Marron, Chief Executive Officer

and President

(Principal Executive Officer)

/s/ ELAINE D. MARION

Elaine D. Marion, Chief Financial Officer

(Principal Financial Officer)

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

XML

Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2021	Nov. 05, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	1-34167
Entity Registrant Name	ePlus inc.
Entity Central Index Key	0001022408
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1817218
Entity Address, Address Line One	13595 Dulles Technology Drive
Entity Address, City or Town	Herndon
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20171-3413
City Area Code	703
Local Phone Number	984-8400
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	PLUS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,508,469

XML

UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2021	Mar. 31, 2021
Current assets:
Cash and cash equivalents	$ 56,950	$ 129,562
Accounts receivable-trade, net	457,308	391,567
Accounts receivable-other, net	57,346	41,053
Inventories	134,514	69,963
Financing receivables-net, current	80,082	106,272
Deferred costs	30,691	28,201
Other current assets	12,675	10,976
Total current assets	829,566	777,594
Financing receivables and operating leases-net	105,855	90,165
Deferred tax asset-net	1,469	1,468
Property, equipment and other assets	43,895	42,289
Goodwill	126,596	126,645
Other intangible assets-net	32,564	38,614
TOTAL ASSETS	1,139,945	1,076,775
Current liabilities:
Accounts payable	121,263	165,162
Accounts payable-floor plan	145,880	98,653
Salaries and commissions payable	36,382	36,839
Deferred revenue	82,937	72,802
Recourse notes payable-current	35,548	5,450
Non-recourse notes payable-current	21,083	50,397
Other current liabilities	32,532	30,061
Total current liabilities	475,625	459,364
Recourse notes payable - long-term	9,360	12,658
Non-recourse notes payable - long-term	4,315	5,664
Other liabilities	37,042	36,679
TOTAL LIABILITIES	526,342	514,365
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding	0	0
Common stock, $0.01 per share par value; 25,000 shares authorized; 13,510 outstanding at September 30, 2021 and 13,503 outstanding at March 31, 2021	146	145
Additional paid-in capital	155,941	152,366
Treasury stock, at cost, 1,070 shares at September 30, 2021 and 993 shares at March 31, 2021	(82,246)	(75,372)
Retained earnings	539,547	484,616
Accumulated other comprehensive income-foreign currency translation adjustment	215	655
Total Stockholders' Equity	613,603	562,410
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,139,945	$ 1,076,775

XML

UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 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)	13,510	13,503
Treasury stock, shares (in shares)	1,070	993

XML

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net sales
Total	$ 458,017	$ 433,081	$ 874,666	$ 788,112
Cost of sales
Total	335,015	334,119	646,152	590,593
Gross profit	123,002	98,962	228,514	197,519
Selling, general, and administrative	74,504	66,889	143,279	136,356
Depreciation and amortization	3,853	3,341	7,779	6,857
Interest and financing costs	342	247	701	824
Operating expenses	78,699	70,477	151,759	144,037
Operating income	44,303	28,485	76,755	53,482
Other income (expense)	(325)	184	(202)	282
Earnings before tax	43,978	28,669	76,553	53,764
Provision for income taxes	12,565	8,823	21,622	16,558
Net earnings	$ 31,413	$ 19,846	$ 54,931	$ 37,206
Net earnings per common share-basic (in dollars per share)	$ 2.36	$ 1.48	$ 4.12	$ 2.79
Net earnings per common share-diluted (in dollars per share)	$ 2.34	$ 1.48	$ 4.09	$ 2.78
Weighted average common shares outstanding-basic (in shares)	13,332	13,372	13,333	13,347
Weighted average common shares outstanding-diluted (in shares)	13,432	13,391	13,431	13,394
Product [Member]
Net sales
Total	$ 397,160	$ 383,656	$ 758,217	$ 690,896
Cost of sales
Total	297,629	302,963	574,856	529,597
Services [Member]
Net sales
Total	60,857	49,425	116,449	97,216
Cost of sales
Total	$ 37,386	$ 31,156	$ 71,296	$ 60,996

XML

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 31,413	$ 19,846	$ 54,931	$ 37,206
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	(506)	520	(440)	557
Other comprehensive income	(506)	520	(440)	557
TOTAL COMPREHENSIVE INCOME	$ 30,907	$ 20,366	$ 54,491	$ 37,763

XML

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net earnings	$ 54,931	$ 37,206
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	12,044	9,460
Provision for credit losses	98	1,766
Share-based compensation expense	3,575	3,648
Deferred taxes	(1)	1,032
Payments from lessees directly to lenders-operating leases	(32)	(13)
Gain on disposal of property, equipment, and operating lease equipment	(525)	(278)
Changes in:
Accounts receivable	(85,463)	1,755
Inventories-net	(64,661)	(23,381)
Financing receivables-net	(18,019)	(54,386)
Deferred costs and other assets	(6,115)	(1,052)
Accounts payable-trade	(43,375)	21,717
Salaries and commissions payable, deferred revenue, and other liabilities	12,539	10,934
Net cash provided by (used in) operating activities	(135,004)	8,408
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment	2,553	456
Purchases of property, equipment and operating lease equipment	(16,243)	(3,267)
Net cash used in investing activities	(13,690)	(2,811)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable	64,815	23,613
Repayments of non-recourse and recourse notes payable	(29,386)	(40,529)
Repurchase of common stock	(6,874)	(4,487)
Repayments of financing of acquisitions	0	(421)
Net borrowings (repayments) on floor plan facility	47,227	91,554
Net cash provided by financing activities	75,782	69,730
Effect of exchange rate changes on cash	300	(477)
Net increase (decrease) in cash and cash equivalents	(72,612)	74,850
Cash and cash equivalents, beginning of period	129,562	86,231
Cash and cash equivalents, end of period	56,950	161,081
Supplemental disclosures of cash flow information:
Cash paid for interest	683	739
Cash paid for income taxes	24,511	12,348
Cash paid for amounts included in the measurement of lease liabilities	2,280	2,975
Schedule of non-cash investing and financing activities:
Proceeds from sale of property, equipment, and leased equipment	100	0
Purchases of property, equipment, and operating lease equipment	(2,386)	(393)
Borrowing of non-recourse and recourse notes payable	41,195	35,780
Repayments of non-recourse and recourse notes payable	(32)	(13)
Vesting of share-based compensation	8,398	7,916
New operating lease assets obtained in exchange for lease obligations	$ 1,070	$ 774

XML

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Mar. 31, 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, 2020	$ 144	145,197	(68,424)	410,219	(991)	486,145
Balance (in shares) at Mar. 31, 2020	13,500
Net earnings						37,206
Balance at Sep. 30, 2020	$ 145	148,845	(72,911)	447,425	(434)	523,070
Balance (in shares) at Sep. 30, 2020	13,537
Balance at Jun. 30, 2020	$ 145	147,082	(71,127)	427,579	(954)	502,725
Balance (in shares) at Jun. 30, 2020	13,553
Issuance of restricted stock awards	$ 0	0	0	0	0	0
Issuance of restricted stock awards (in shares)	8
Share-based compensation	$ 0	1,763	0	0	0	1,763
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (1,784)	0	0	(1,784)
Repurchase of common stock (in shares)			(24)
Net earnings	0	0	$ 0	19,846	0	19,846
Foreign currency translation adjustment	0	0	0	0	520	520
Balance at Sep. 30, 2020	$ 145	148,845	(72,911)	447,425	(434)	523,070
Balance (in shares) at Sep. 30, 2020	13,537
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
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
Net earnings						$ 54,931
Balance at Sep. 30, 2021	$ 146	155,941	(82,246)	539,547	215	$ 613,603
Balance (in shares) at Sep. 30, 2021	13,510					13,510
Balance at Jun. 30, 2021	$ 146	154,101	(79,483)	508,134	721	$ 583,619
Balance (in shares) at Jun. 30, 2021	13,536
Issuance of restricted stock awards	$ 0	0	0	0	0	0
Issuance of restricted stock awards (in shares)	6
Share-based compensation	$ 0	1,840	0	0	0	1,840
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (2,763)	0	0	(2,763)
Repurchase of common stock (in shares)			(32)
Net earnings	0	0	$ 0	31,413	0	31,413
Foreign currency translation adjustment	0	0	0	0	(506)	(506)
Balance at Sep. 30, 2021	$ 146	$ 155,941	$ (82,246)	$ 539,547	$ 215	$ 613,603
Balance (in shares) at Sep. 30, 2021	13,510					13,510

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Sep. 30, 2021

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions 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 six months ended September 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 six months ended September 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 40% and 41% of our technology segment’s net sales for the three months ended September 30, 2021, and 2020, respectively, and 41% and 40% of our technology segment’s net sales for the six months ended September 30, 2021, and 2020, respectively.

SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2021.

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REVENUES

6 Months Ended

Sep. 30, 2021

REVENUES [Abstract]

REVENUES

2. REVENUES

CONTRACT BALANCES

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $53.8 million and $54.6 million of receivables from contracts with customers included within financing receivables as of September 30, 2021, and March 31, 2021, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	September 30, 2021		March 31, 2021
Current (included in deferred revenue)	$	82,184	$	72,299
Non-current (included in other liabilities)	$	27,813	$	26,042

Revenue recognized from the beginning contract liability balance was $14.6 million and $36.1 million for the three and six months ended September 30, 2021, respectively, and $11.3 million and $26.9 million for the three and six months ended September 30, 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):

Remainder of the year ending March 31, 2022	$	26,309
Year ending March 31, 2023		24,656
Year ending March 31, 2024		12,595
Year ending March 31, 2025		2,920
Year ending March 31, 2026 and thereafter		1,467
Total remaining performance obligations	$	67,947

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

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FINANCING RECEIVABLES AND OPERATING LEASES

6 Months Ended

Sep. 30, 2021

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

FINANCING RECEIVABLES AND OPERATING LEASES

3. 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. Often, our leases provide the lessee a bargain purchase option.

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three and six months ended September 30, 2021, and 2020 (in thousands):

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Net sales	$	5,962	$	7,655	$	9,779	$	17,818
Cost of sales		4,926		5,402		8,291		10,729
Gross profit	$	1,036	$	2,253	$	1,488	$	7,089

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three and six months ended September 30, 2021, and 2020 (in thousands):

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Interest income on sales-type leases	$	1,000	$	1,884	$	2,290	$	4,103
Lease income on operating leases	$	6,634	$	3,900	$	11,844	$	7,738

FINANCING RECEIVABLES—NET

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

September 30, 2021	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	104,066		$	54,261		$	158,327
Unguaranteed residual value (1)		-			13,411			13,411
Initial direct costs, net of amortization		271			-			271
Unearned income		-			(7,095	)		(7,095	)
Allowance for credit losses (2)		(1,687	)		(672	)		(2,359	)
Total, net	$	102,650		$	59,905		$	162,555
Reported as:
Current	$	55,928		$	24,154		$	80,082
Long-term		46,722			35,751			82,473
Total, net	$	102,650		$	59,905		$	162,555

(1) Includes unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 6, “Allowance for Credit Losses” for details.

March 31, 2021	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	112,641		$	68,393		$	181,034
Unguaranteed residual value (1)		-			14,876			14,876
Initial direct costs, net of amortization		425			-			425
Unearned income		-			(8,393	)		(8,393	)
Allowance for credit losses (2)		(1,212	)		(1,171	)		(2,383	)
Total, net	$	111,854		$	73,705		$	185,559
Reported as:
Current	$	73,175		$	33,097		$	106,272
Long-term		38,679			40,608			79,287
Total, net	$	111,854		$	73,705		$	185,559

(1) Includes unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 6, “Allowance for Credit Losses” for details.

OPERATING LEASES—NET

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

	September 30, 2021			March 31, 2021
Cost of equipment under operating leases	$	34,082		$	18,748
Accumulated depreciation		(10,700	)		(7,870	)
Investment in operating lease equipment—net (1)	$	23,382		$	10,878

(1) Amounts include estimated unguaranteed residual values of $4.6 million and $2.5 million as of September 30, 2021, and March 31, 2021, respectively.

TRANSFERS OF FINANCIAL ASSETS

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

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of  September 30, 2021, and March 31, 2021, we had financing receivables of $22.6 million and $60.5 million, respectively, and operating leases of $8.1 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 September 30, 2021, and 2020, we recognized net gains of $10.1 million and $4.5 million, respectively, and total proceeds from these sales were $615.0 million and $118.5 million, respectively. For the year to date periods ended September 30, 2021, and 2020, we recognized net gains of $13.3 million and $7.0 million, respectively, and total proceeds from these sales were $690.3 million and $191.7 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenue, which is recognized as we perform the services. As of September 30, 2021, and March 31, 2021, we had deferred revenue of $0.5 million and $0.3 million, respectively, 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 September 30, 2021, the total potential payments that could result from these indemnities is immaterial.

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LESSEE ACCOUNTING

6 Months Ended

Sep. 30, 2021

LESSEE ACCOUNTING [Abstract]

LESSEE ACCOUNTING

4. 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 as part of selling, general and administrative expenses for the three months ended September 30, 2021, and $1.5 million for the three months ending September 30, 2020, and $2.6 million and $3.1 million for the six months ended September 30, 2021, and 2020, respectively.

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Sep. 30, 2021

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

5. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2021 (in thousands):

	Six months ended September 30, 2021
	Goodwill			Accumulated Impairment Loss			Net Carrying Amount
Beginning balance	$	135,318		$	(8,673	)	$	126,645
Foreign currency translations		(49	)		-			(49	)
Ending balance	$	135,269		$	(8,673	)	$	126,596

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations. Our entire balance as of September 30, 2021, relates to our technology segment, which we also determined to be one reporting unit. The change in our goodwill balance during the six months ended September 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 September 30, 2021, and March 31, 2021 (in thousands):

	September 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	$	77,281	$	(47,424	)	$	29,857	$	77,335	$	(42,115	)	$	35,220
Capitalized software development		10,491		(7,784	)		2,707		10,553		(7,159	)		3,394
Total	$	87,772	$	(55,208	)	$	32,564	$	87,888	$	(49,274	)	$	38,614

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 September 30, 2021, and September 30, 2020, respectively, and $6.0 million and $5.0 million for the six months ended September 30, 2021, and 2020, respectively.

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ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Sep. 30, 2021

ALLOWANCE FOR CREDIT LOSSES [Abstract]

ALLOWANCE FOR CREDIT LOSSES

6. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the six months ended September 30, 2021, and 2020 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2021	$	2,064		$	1,212		$	1,171		$	4,447
Provision for credit losses		116			479			(497	)		98
Write-offs and other		(64	)		(4	)		(2	)		(70	)
Balance September 30, 2021	$	2,116		$	1,687		$	672		$	4,475

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

The following table provides the amortized cost basis of our financing receivables by credit quality rating “CQR” and by credit origination year as of September 30, 2021 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2022		2021		2020		2019		2018		2017		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	38,015	$	42,542	$	2,256	$	517	$	226	$	10	$	83,566	$	(35,004	)	$	48,562
Average CQR		12,933		4,794		2,104		342		3		-		20,176		(2,655	)		17,521
Low CQR		-		-		-		324		-		-		324		-			324
Total	$	50,948	$	47,336	$	4,360	$	1,183	$	229	$	10	$	104,066	$	(37,659	)	$	66,407
Lease receivables:
High CQR	$	12,716	$	10,504	$	4,253	$	1,424	$	168	$	48	$	29,113	$	(6,911	)	$	22,202
Average CQR		8,906		9,261		2,266		233		141		22		20,829		(5,641	)		15,188
Low CQR		1,497		1,057		-		-		-		-		2,554		-			2,554
Total	$	23,119	$	20,822	$	6,519	$	1,657	$	309	$	70	$	52,496	$	(12,552	)	$	39,944
Total amortized cost (1)	$	74,067	$	68,158	$	10,879	$	2,840	$	538	$	80	$	156,562	$	(50,211	)	$	106,351

(1) Unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $271 thousand are excluded from amortized cost.

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

We evaluate our customers using an internally assigned CQR:

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

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

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

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2021 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2021		2020		2019		2018		2017		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	93,793	$	6,250	$	769	$	771	$	19	$	101,602	$	(63,471	)	$	38,131
Average CQR		7,689		2,468		550		8		-		10,715		(2,896	)		7,819
Low CQR		-		-		324		-		-		324		-			324
Total	$	101,482	$	8,718	$	1,643	$	779	$	19	$	112,641	$	(66,367	)	$	46,274
Lease receivables:
High CQR	$	28,898	$	5,885	$	1,798	$	463	$	125	$	37,169	$	(7,468	)	$	29,701
Average CQR		23,445		3,482		1,017		270		40		28,254		(4,592	)		23,662
Low CQR		-		-		-		-		-		-		-			-
Total	$	52,343	$	9,367	$	2,815	$	733	$	165	$	65,423	$	(12,060	)	$	53,363
Total amortized cost (1)	$	153,825	$	18,085	$	4,458	$	1,512	$	184	$	178,064	$	(78,427	)	$	99,637

(1) Unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $425 thousand are excluded from amortized cost.

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

The following table provides an aging analysis of our financing receivables as of September 30, 2021 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	653	$	1,658	$	713	$	3,024	$	6,737	$	9,761	$	94,305	$	104,066
Lease receivables		323		493		726		1,542		2,480		4,022		48,474		52,496
Total	$	976	$	2,151	$	1,439	$	4,566	$	9,217	$	13,783	$	142,779	$	156,562

The following table provides an aging analysis of our financing receivables as of March 31, 2021 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	648	$	910	$	673	$	2,231	$	3,240	$	5,471	$	107,170	$	112,641
Lease receivables		804		132		643		1,579		2,566		4,145		61,278		65,423
Total	$	1,452	$	1,042	$	1,316	$	3,810	$	5,806	$	9,616	$	168,448	$	178,064

Our financial assets on nonaccrual status were not significant as of September 30, 2021, and March 31, 2021.

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PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

6 Months Ended

Sep. 30, 2021

PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES [Abstract]

PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

7. PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES

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

	September 30, 2021		March 31, 2021
Other current assets:
Deposits & funds held in escrow	$	453	$	759
Prepaid assets		11,703		9,939
Other		519		278
Total	$	12,675	$	10,976
Property, equipment and other assets
Property and equipment, net	$	7,368	$	7,388
Deferred costs - non-current		19,770		19,063
Right-of-use assets		7,562		8,763
Other		9,195		7,075
Total	$	43,895	$	42,289
Other current liabilities:
Accrued expenses	$	13,856	$	13,598
Accrued income taxes payable		2,146		4,439
Short-term lease liability		3,835		3,934
Other		12,695		8,090
Total	$	32,532	$	30,061
Other liabilities:
Deferred revenue -  non-current	$	28,174	$	26,309
Long-term lease liability		3,816		5,040
Other		5,052		5,330
Total	$	37,042	$	36,679

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

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CREDIT FACILITY AND NOTES PAYABLE

6 Months Ended

Sep. 30, 2021

CREDIT FACILITY AND NOTES PAYABLE [Abstract]

CREDIT FACILITY AND NOTES PAYABLE

8. CREDIT FACILITY AND NOTES PAYABLE

CREDIT FACILITY

Throughout the current fiscal year and until October 12, 2021, ePlus Technology, inc. and certain of its subsidiaries (the “Borrowers”), which are part of our technology segment, financed their operations, in addition to funds generated from operations, with a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). This facility provided short-term capital for our technology segment. There were two components of the WFCDF credit facility: (1) a floor plan component, and (2) an accounts receivable component.

Under the WFCDF credit facility, there was an aggregate limit for the two components, except during a temporary uplift, of $275 million. We could elect to temporarily increase the aggregate limit to $350 million for a period of not less than 30 days, provided that all such periods not exceed 150 days in the aggregate in any calendar year. Additionally, the WFCDF credit facility had a limit on the accounts receivable component of $100 million. WFCDF charged 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 September 30, 2021, the limit of the two components of the credit facility was $350 million as result of our election to temporarily uplift the aggregate limit.

Our borrowing availability under the credit facility varied, based upon the value of the receivables and inventory of the Borrowers. We had outstanding balances of $145.9 million and $98.7 million under the floor plan component as of September 30, 2021, and March 31, 2021, respectively. This component is presented as part of as accounts payable – floorplan. Under the accounts receivable component, we had $29 million as of September 30, 2021 and no outstanding balance 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 September 30, 2021, and March 31, 2021.

The WFCDF credit facility was secured by the assets of the Borrowers. Additionally, the credit facility required a guaranty of $10.5 million by ePlus inc.

The WFCDF credit facility restricted the ability of the Borrowers to pay dividends to ePlus inc. unless their available borrowing met certain thresholds. As of September 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 required that financial statements of the Borrowers be provided within 45 days of each quarter and 90 days of each fiscal year end and required that other operational reports be provided on a regular basis. Either party could terminate with 90 days’ written notice.

On October 13, 2021, we entered into a First Amended and Restated Credit Agreement by and among the Borrowers, WFCDF, as administrative agent thereunder, various banks and other financial institutions (including WFCDF) who are parties thereto as lenders (collectively, the “Lenders”) and others, pursuant to which, among other things, the Lenders established for the benefit of the Borrowers a discretionary senior secured floorplan facility in the aggregate principal amount of up to $375 million, together with a sublimit for a revolving credit facility for up to $100 million (collectively, the “2021 Credit Facility”).

The loss of the 2021 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. As of September 30, 2021, we had $44.9 million in recourse borrowings which includes $29.0 million outstanding under our revolving credit facility with WFCDF, and $15.9 million arising 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 September 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 September 30, 2021, and March 31, 2021, we had $25.4 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 3.59% and 3.35%, as of September 30, 2021, and March 31, 2021, respectively.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

9. 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

6 Months Ended

Sep. 30, 2021

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

10. EARNINGS PER SHARE

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

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three and six months ended September 30, 2021, and 2020, respectively (in thousands, except per share data).

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net earnings attributable to common shareholders - basic and diluted	$	31,413	$	19,846	$	54,931	$	37,206
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		13,332		13,372		13,333		13,347
Effect of dilutive shares		100		19		98		47
Weighted average shares common outstanding — diluted		13,432		13,391		13,431		13,394
Earnings per common share - basic	$	2.36	$	1.48	$	4.12	$	2.79
Earnings per common share - diluted	$	2.34	$	1.48	$	4.09	$	2.78

STOCK SPLIT

On November 9, 2021, our Board of Directors declared a two-for-one stock split effected in the form of a stock dividend. The stock split will be in the form of a 100 percent stock dividend payable on December 13, 2021, to shareholders of record at the close of business on November 29, 2021. We expect that our common stock will begin trading at the split-adjusted price on December 14, 2021.

All references made to share or per share amounts in the accompanying unaudited consolidated financial statements and applicable disclosures herein, other than the table immediately below, are presented on a pre-split basis. The following table provides pro forma earnings per share, giving retroactive effect to the stock split (in thousands, except per share data):

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Earnings per common share:
Basic - pro forma		1.18		0.74		2.06		1.39
Diluted - pro forma		1.17		0.74		2.04		1.39
Weighted average common shares outstanding:
Basic - pro forma		26,664		26,744		26,666		26,694
Diluted - pro forma		26,864		26,782		26,862		26,788

As a result of the stock split, all historical per share data and number of shares outstanding presented in future financial statements will be retroactively adjusted.

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STOCKHOLDERS' EQUITY

6 Months Ended

Sep. 30, 2021

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

11. 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 six months ended September 30, 2021, we purchased 49,028 shares of our outstanding common stock at a value of $4.3 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 six months ended September 30, 2020, we purchased 24,318 shares of our outstanding common stock at a value of $1.8 million under the share repurchase plan; we also purchased 37,640 shares of common stock at a value of $2.7 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

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SHARE-BASED COMPENSATION

6 Months Ended

Sep. 30, 2021

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

12. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

ePlus’ 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”) was approved by our shareholders on September 16, 2021. The 2021 Employee LTIP is effective October 1, 2021 and replaces the ePlus inc. 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), as approved by our stockholders on September 13, 2012. Beginning October 1, 2021, no further shares will be granted under the 2012 Employee LTIP.

As of September 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) 2012 Employee LTIP.

These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most recent trading day preceding such date if there were no trades on such date.

RESTRICTED STOCK ACTIVITY

For the six months ended September 30, 2021, we granted 6,393 shares under the 2017 Director LTIP, and 77,861 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2020, we granted 9,309 shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. A summary of the grants is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2021		183,378		$	74.97
Granted		84,254		$	92.99
Vested		(92,093	)	$	78.12
Nonvested September 30, 2021		175,539		$	82.00

Upon each vesting period of the restricted stock awards, employees are subject to minimum tax withholding obligations. Under the 2012 Employee LTIP, we purchased enough shares due to participants to satisfy the minimum tax withholding requirements on employee stock awards. For the six months ended September 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. Share-based compensation expense for both the three and six months ended September 30, 2021, and 2020, were $1.8 million and $3.6 million, respectively. Unrecognized compensation expense related to non-vested restricted stock was $12.4 million as of September 30, 2021, which will be fully recognized over the next 33 months.

We also provide our employees with a contributory 401(k) profit sharing plan, to which we may contribute from time to time at our sole discretion. Employer contributions to the plan are always fully vested. Our estimated contribution expense for the plan for the three months ended September 30, 2021, and 2020, was $1.0 million and $0.7 million, respectively. For the six months ended September 30, 2021, and 2020, our estimated contribution expense for the plan was $1.8 million and $1.4 million, respectively.

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INCOME TAXES

6 Months Ended

Sep. 30, 2021

INCOME TAXES [Abstract]

INCOME TAXES

13. INCOME TAXES

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

Our total gross unrecognized tax benefits recorded for uncertain income tax, and interest and penalties thereon, were negligible as of September 30, 2021, and September 30, 2020. We had no additions or reductions to our gross unrecognized tax benefits during the six months ended September 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

6 Months Ended

Sep. 30, 2021

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

We account for the fair values of our assets and liabilities in accordance with Codification Topic 820, Fair Value Measurement and Disclosure. The following table summarizes the fair value hierarchy of our financial instruments as of September 30, 2021, and March 31, 2021 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2021
Assets:
Money market funds	$	136	$	136	$	-	$	-
March 31, 2021
Assets:
Money market funds	$	45,134	$	45,134	$	-	$	-

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BUSINESS COMBINATIONS

6 Months Ended

Sep. 30, 2021

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

15. BUSINESS COMBINATIONS

SYSTEMS MANAGEMENT PLANNING, INC. (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):

	Acquisition Date Amount
Accounts receivable	$	14,526
Other assets		3,344
Identified intangible assets		14,280
Accounts payable and other current liabilities		(11,424	)
Performance obligations		(2,020	)
Total identifiable net assets		18,706
Goodwill		8,328
Total purchase consideration	$	27,034

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

6 Months Ended

Sep. 30, 2021

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

16. SEGMENT REPORTING

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

Our reportable segment information for the three-and six-month periods ended September 30, 2021, and 2020 are summarized in the following table (in thousands):

	Three Months Ended
	September 30, 2021							September 30, 2020
	Technology		Financing		Total			Technology		Financing		Total
Sales
Product	$	375,444	$	21,716	$	397,160		$	369,934	$	13,722	$	383,656
Service		60,857		-		60,857			49,425		-		49,425
Net sales		436,301		21,716		458,017			419,359		13,722		433,081
Cost of Sales
Product		293,837		3,792		297,629			301,006		1,957		302,963
Service		37,386		-		37,386			31,156		-		31,156
Total cost of sales		331,223		3,792		335,015			332,162		1,957		334,119
Gross Profit		105,078		17,924		123,002			87,197		11,765		98,962
Selling, general, and administrative		70,803		3,701		74,504			62,586		4,303		66,889
Depreciation and amortization		3,825		28		3,853			3,313		28		3,341
Interest and financing costs		199		143		342			1		246		247
Operating expenses		74,827		3,872		78,699			65,900		4,577		70,477
Operating income		30,251		14,052		44,303			21,297		7,188		28,485
Other income (expense)						(325	)						184
Earnings before tax					$	43,978						$	28,669
Net Sales
Contracts with customers	$	430,339	$	1,776	$	432,115		$	412,357	$	1,028	$	413,385
Financing and other		5,962		19,940		25,902			7,002		12,694		19,696
Net Sales	$	436,301	$	21,716	$	458,017		$	419,359	$	13,722	$	433,081
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	4,074	$	1,888	$	5,962		$	3,499	$	1,182	$	4,681
Purchases of property, equipment and operating lease equipment	$	948	$	8,301	$	9,249		$	990	$	-	$	990
Selected Financial Data - Balance Sheet
Total assets	$	902,070	$	237,875	$	1,139,945		$	812,633	$	226,078	$	1,038,711

	Six Months Ended
	September 30, 2021							September 30, 2020
	Technology		Financing		Total			Technology		Financing		Total
Sales
Product	$	720,210	$	38,007	$	758,217		$	663,367	$	27,529	$	690,896
Service		116,449		-		116,449			97,216		-		97,216
Net sales		836,659		38,007		874,666			760,583		27,529		788,112
Cost of Sales
Product		564,852		10,004		574,856			525,549		4,048		529,597
Service		71,296		-		71,296			60,996		-		60,996
Total cost of sales		636,148		10,004		646,152			586,545		4,048		590,593
Gross Profit		200,511		28,003		228,514			174,038		23,481		197,519
Selling, general, and administrative		136,956		6,323		143,279			128,142		8,214		136,356
Depreciation and amortization		7,723		56		7,779			6,801		56		6,857
Interest and financing costs		358		343		701			266		558		824
Operating expenses		145,037		6,722		151,759			135,209		8,828		144,037
Operating income		55,474		21,281		76,755			38,829		14,653		53,482
Other income (expense)						(202	)						282
Earnings before tax					$	76,553						$	53,764
Net Sales
Contracts with customers	$	826,880	$	7,194	$	834,074		$	746,344	$	1,988	$	748,332
Financing and other		9,779		30,813		40,592			14,239		25,541		39,780
Net Sales	$	836,659	$	38,007	$	874,666		$	760,583	$	27,529	$	788,112
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	8,177	$	3,867	$	12,044		$	7,133	$	2,327	$	9,460
Purchases of property, equipment and operating lease equipment	$	2,255	$	13,988	$	16,243		$	3,101	$	166	$	3,267
Selected Financial Data - Balance Sheet
Total assets	$	902,070	$	237,875	$	1,139,945		$	812,633	$	226,078	$	1,038,711

TECHNOLOGY SEGMENT DISAGGREGATION OF REVENUE

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized for the three and six month periods ended September 30, 2021, and 2020 in the tables below (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020
Customer end market:
Telecom, Media & Entertainment	$	115,784		$	96,927		$	227,976		$	153,579
Technology		53,752			76,321			122,892			146,288
State and local government and educational institutions		68,662			76,492			134,077			147,055
Healthcare		88,237			59,252			142,925			105,788
Financial Services		37,036			46,732			67,047			94,153
All others		72,830			63,635			141,742			113,720
Net sales		436,301			419,359			836,659			760,583
Less: Revenue from financing and other		(5,962	)		(7,002	)		(9,779	)		(14,239	)
Revenue from contracts with customers	$	430,339		$	412,357		$	826,880		$	746,344

	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020
Vendor
Cisco Systems	$	174,072		$	173,166		$	340,974		$	301,098
Dell / EMC		43,498			15,349			69,838			46,430
Juniper Networks		18,438			24,716			43,152			38,295
HP Inc. & HPE		14,038			16,395			31,240			33,433
Arista Networks		8,047			13,443			19,545			20,263
NetApp		29,536			9,914			39,993			25,335
All others		148,672			166,376			291,917			295,729
Net sales		436,301			419,359			836,659			760,583
Less: Revenue from financing and other		(5,962	)		(7,002	)		(9,779	)		(14,239	)
Revenue from contracts with customers	$	430,339		$	412,357		$	826,880		$	746,344

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)

6 Months Ended

Sep. 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.

INTERIM FINANCIAL STATEMENTS

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the six months ended September 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 six months ended September 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

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

CONCENTRATIONS OF RISK

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which were 40% and 41% of our technology segment’s net sales for the three months ended September 30, 2021, and 2020, respectively, and 41% and 40% of our technology segment’s net sales for the six months ended September 30, 2021, and 2020, respectively.

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REVENUES (Tables)

6 Months Ended

Sep. 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 $53.8 million and $54.6 million of receivables from contracts with customers included within financing receivables as of September 30, 2021, and March 31, 2021, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	September 30, 2021		March 31, 2021
Current (included in deferred revenue)	$	82,184	$	72,299
Non-current (included in other liabilities)	$	27,813	$	26,042

Remaining Performance Obligations

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

Remainder of the year ending March 31, 2022	$	26,309
Year ending March 31, 2023		24,656
Year ending March 31, 2024		12,595
Year ending March 31, 2025		2,920
Year ending March 31, 2026 and thereafter		1,467
Total remaining performance obligations	$	67,947

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FINANCING RECEIVABLES AND OPERATING LEASES (Tables)

6 Months Ended

Sep. 30, 2021

FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]

Sales-type Leases

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the three and six months ended September 30, 2021, and 2020 (in thousands):

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Net sales	$	5,962	$	7,655	$	9,779	$	17,818
Cost of sales		4,926		5,402		8,291		10,729
Gross profit	$	1,036	$	2,253	$	1,488	$	7,089

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the three and six months ended September 30, 2021, and 2020 (in thousands):

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Interest income on sales-type leases	$	1,000	$	1,884	$	2,290	$	4,103
Lease income on operating leases	$	6,634	$	3,900	$	11,844	$	7,738

Notes Receivable Net and Investments in Leases

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

September 30, 2021	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	104,066		$	54,261		$	158,327
Unguaranteed residual value (1)		-			13,411			13,411
Initial direct costs, net of amortization		271			-			271
Unearned income		-			(7,095	)		(7,095	)
Allowance for credit losses (2)		(1,687	)		(672	)		(2,359	)
Total, net	$	102,650		$	59,905		$	162,555
Reported as:
Current	$	55,928		$	24,154		$	80,082
Long-term		46,722			35,751			82,473
Total, net	$	102,650		$	59,905		$	162,555

(1) Includes unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 6, “Allowance for Credit Losses” for details.

March 31, 2021	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	112,641		$	68,393		$	181,034
Unguaranteed residual value (1)		-			14,876			14,876
Initial direct costs, net of amortization		425			-			425
Unearned income		-			(8,393	)		(8,393	)
Allowance for credit losses (2)		(1,212	)		(1,171	)		(2,383	)
Total, net	$	111,854		$	73,705		$	185,559
Reported as:
Current	$	73,175		$	33,097		$	106,272
Long-term		38,679			40,608			79,287
Total, net	$	111,854		$	73,705		$	185,559

(1) Includes unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable.

(2) Refer to Note 6, “Allowance for Credit Losses” for details.

Investment in Operating Lease Equipment - Net

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

	September 30, 2021			March 31, 2021
Cost of equipment under operating leases	$	34,082		$	18,748
Accumulated depreciation		(10,700	)		(7,870	)
Investment in operating lease equipment—net (1)	$	23,382		$	10,878

(1) Amounts include estimated unguaranteed residual values of $4.6 million and $2.5 million as of September 30, 2021, and March 31, 2021, respectively.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Sep. 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 six months ended September 30, 2021 (in thousands):

	Six months ended September 30, 2021
	Goodwill			Accumulated Impairment Loss			Net Carrying Amount
Beginning balance	$	135,318		$	(8,673	)	$	126,645
Foreign currency translations		(49	)		-			(49	)
Ending balance	$	135,269		$	(8,673	)	$	126,596

Other Intangible Assets

Our other intangible assets consist of the following on September 30, 2021, and March 31, 2021 (in thousands):

	September 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	$	77,281	$	(47,424	)	$	29,857	$	77,335	$	(42,115	)	$	35,220
Capitalized software development		10,491		(7,784	)		2,707		10,553		(7,159	)		3,394
Total	$	87,772	$	(55,208	)	$	32,564	$	87,888	$	(49,274	)	$	38,614

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ALLOWANCE FOR CREDIT LOSSES (Tables)

6 Months Ended

Sep. 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 six months ended September 30, 2021, and 2020 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance April 1, 2021	$	2,064		$	1,212		$	1,171		$	4,447
Provision for credit losses		116			479			(497	)		98
Write-offs and other		(64	)		(4	)		(2	)		(70	)
Balance September 30, 2021	$	2,116		$	1,687		$	672		$	4,475

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

Amortized Cost Basis of Financing Receivables by Credit Quality Rating and Credit Origination Year

The following table provides the amortized cost basis of our financing receivables by credit quality rating “CQR” and by credit origination year as of September 30, 2021 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2022		2021		2020		2019		2018		2017		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	38,015	$	42,542	$	2,256	$	517	$	226	$	10	$	83,566	$	(35,004	)	$	48,562
Average CQR		12,933		4,794		2,104		342		3		-		20,176		(2,655	)		17,521
Low CQR		-		-		-		324		-		-		324		-			324
Total	$	50,948	$	47,336	$	4,360	$	1,183	$	229	$	10	$	104,066	$	(37,659	)	$	66,407
Lease receivables:
High CQR	$	12,716	$	10,504	$	4,253	$	1,424	$	168	$	48	$	29,113	$	(6,911	)	$	22,202
Average CQR		8,906		9,261		2,266		233		141		22		20,829		(5,641	)		15,188
Low CQR		1,497		1,057		-		-		-		-		2,554		-			2,554
Total	$	23,119	$	20,822	$	6,519	$	1,657	$	309	$	70	$	52,496	$	(12,552	)	$	39,944
Total amortized cost (1)	$	74,067	$	68,158	$	10,879	$	2,840	$	538	$	80	$	156,562	$	(50,211	)	$	106,351

(1) Unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $271 thousand are excluded from amortized cost.

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

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2021 (in thousands):

	Amortized cost basis by origination year ending March 31,
	2021		2020		2019		2018		2017		Total		Transfers (2)			Net credit exposure
Notes receivable:
High CQR	$	93,793	$	6,250	$	769	$	771	$	19	$	101,602	$	(63,471	)	$	38,131
Average CQR		7,689		2,468		550		8		-		10,715		(2,896	)		7,819
Low CQR		-		-		324		-		-		324		-			324
Total	$	101,482	$	8,718	$	1,643	$	779	$	19	$	112,641	$	(66,367	)	$	46,274
Lease receivables:
High CQR	$	28,898	$	5,885	$	1,798	$	463	$	125	$	37,169	$	(7,468	)	$	29,701
Average CQR		23,445		3,482		1,017		270		40		28,254		(4,592	)		23,662
Low CQR		-		-		-		-		-		-		-			-
Total	$	52,343	$	9,367	$	2,815	$	733	$	165	$	65,423	$	(12,060	)	$	53,363
Total amortized cost (1)	$	153,825	$	18,085	$	4,458	$	1,512	$	184	$	178,064	$	(78,427	)	$	99,637

(1) Unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $425 thousand are excluded from amortized cost.

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

Aging Analysis of Financing Receivables

The following table provides an aging analysis of our financing receivables as of September 30, 2021 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	653	$	1,658	$	713	$	3,024	$	6,737	$	9,761	$	94,305	$	104,066
Lease receivables		323		493		726		1,542		2,480		4,022		48,474		52,496
Total	$	976	$	2,151	$	1,439	$	4,566	$	9,217	$	13,783	$	142,779	$	156,562

The following table provides an aging analysis of our financing receivables as of March 31, 2021 (in thousands):

	31-60 Days Past Due		61-90 Days Past Due		> 90 Days Past Due		Total Past Due		Current		Total Billed		Unbilled		Amortized Cost
Notes receivable	$	648	$	910	$	673	$	2,231	$	3,240	$	5,471	$	107,170	$	112,641
Lease receivables		804		132		643		1,579		2,566		4,145		61,278		65,423
Total	$	1,452	$	1,042	$	1,316	$	3,810	$	5,806	$	9,616	$	168,448	$	178,064

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PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES (Tables)

6 Months Ended

Sep. 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):

	September 30, 2021		March 31, 2021
Other current assets:
Deposits & funds held in escrow	$	453	$	759
Prepaid assets		11,703		9,939
Other		519		278
Total	$	12,675	$	10,976
Property, equipment and other assets
Property and equipment, net	$	7,368	$	7,388
Deferred costs - non-current		19,770		19,063
Right-of-use assets		7,562		8,763
Other		9,195		7,075
Total	$	43,895	$	42,289
Other current liabilities:
Accrued expenses	$	13,856	$	13,598
Accrued income taxes payable		2,146		4,439
Short-term lease liability		3,835		3,934
Other		12,695		8,090
Total	$	32,532	$	30,061
Other liabilities:
Deferred revenue -  non-current	$	28,174	$	26,309
Long-term lease liability		3,816		5,040
Other		5,052		5,330
Total	$	37,042	$	36,679

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EARNINGS PER SHARE (Tables)

6 Months Ended

Sep. 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 and six months ended September 30, 2021, and 2020, respectively (in thousands, except per share data).

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Net earnings attributable to common shareholders - basic and diluted	$	31,413	$	19,846	$	54,931	$	37,206
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		13,332		13,372		13,333		13,347
Effect of dilutive shares		100		19		98		47
Weighted average shares common outstanding — diluted		13,432		13,391		13,431		13,394
Earnings per common share - basic	$	2.36	$	1.48	$	4.12	$	2.79
Earnings per common share - diluted	$	2.34	$	1.48	$	4.09	$	2.78

Pro Forma Earnings per Share

All references made to share or per share amounts in the accompanying unaudited consolidated financial statements and applicable disclosures herein, other than the table immediately below, are presented on a pre-split basis. The following table provides pro forma earnings per share, giving retroactive effect to the stock split (in thousands, except per share data):

	Three Months Ended September 30,				Six Months Ended September 30,
	2021		2020		2021		2020
Earnings per common share:
Basic - pro forma		1.18		0.74		2.06		1.39
Diluted - pro forma		1.17		0.74		2.04		1.39
Weighted average common shares outstanding:
Basic - pro forma		26,664		26,744		26,666		26,694
Diluted - pro forma		26,864		26,782		26,862		26,788

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Sep. 30, 2021

SHARE-BASED COMPENSATION [Abstract]

Summary of Grants

For the six months ended September 30, 2021, we granted 6,393 shares under the 2017 Director LTIP, and 77,861 restricted shares under the 2012 Employee LTIP. For the six months ended September 30, 2020, we granted 9,309 shares under the 2017 Director LTIP, and 89,873 restricted shares under the 2012 Employee LTIP. A summary of the grants is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2021		183,378		$	74.97
Granted		84,254		$	92.99
Vested		(92,093	)	$	78.12
Nonvested September 30, 2021		175,539		$	82.00

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Sep. 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 September 30, 2021, and March 31, 2021 (in thousands):

			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2021
Assets:
Money market funds	$	136	$	136	$	-	$	-
March 31, 2021
Assets:
Money market funds	$	45,134	$	45,134	$	-	$	-

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BUSINESS COMBINATIONS (Tables)

6 Months Ended

Sep. 30, 2021

BUSINESS COMBINATIONS [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):

	Acquisition Date Amount
Accounts receivable	$	14,526
Other assets		3,344
Identified intangible assets		14,280
Accounts payable and other current liabilities		(11,424	)
Performance obligations		(2,020	)
Total identifiable net assets		18,706
Goodwill		8,328
Total purchase consideration	$	27,034

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SEGMENT REPORTING (Tables)

6 Months Ended

Sep. 30, 2021

SEGMENT REPORTING [Abstract]

Segment Reporting Information, by Reportable Segment

Our reportable segment information for the three-and six-month periods ended September 30, 2021, and 2020 are summarized in the following table (in thousands):

	Three Months Ended
	September 30, 2021							September 30, 2020
	Technology		Financing		Total			Technology		Financing		Total
Sales
Product	$	375,444	$	21,716	$	397,160		$	369,934	$	13,722	$	383,656
Service		60,857		-		60,857			49,425		-		49,425
Net sales		436,301		21,716		458,017			419,359		13,722		433,081
Cost of Sales
Product		293,837		3,792		297,629			301,006		1,957		302,963
Service		37,386		-		37,386			31,156		-		31,156
Total cost of sales		331,223		3,792		335,015			332,162		1,957		334,119
Gross Profit		105,078		17,924		123,002			87,197		11,765		98,962
Selling, general, and administrative		70,803		3,701		74,504			62,586		4,303		66,889
Depreciation and amortization		3,825		28		3,853			3,313		28		3,341
Interest and financing costs		199		143		342			1		246		247
Operating expenses		74,827		3,872		78,699			65,900		4,577		70,477
Operating income		30,251		14,052		44,303			21,297		7,188		28,485
Other income (expense)						(325	)						184
Earnings before tax					$	43,978						$	28,669
Net Sales
Contracts with customers	$	430,339	$	1,776	$	432,115		$	412,357	$	1,028	$	413,385
Financing and other		5,962		19,940		25,902			7,002		12,694		19,696
Net Sales	$	436,301	$	21,716	$	458,017		$	419,359	$	13,722	$	433,081
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	4,074	$	1,888	$	5,962		$	3,499	$	1,182	$	4,681
Purchases of property, equipment and operating lease equipment	$	948	$	8,301	$	9,249		$	990	$	-	$	990
Selected Financial Data - Balance Sheet
Total assets	$	902,070	$	237,875	$	1,139,945		$	812,633	$	226,078	$	1,038,711

	Six Months Ended
	September 30, 2021							September 30, 2020
	Technology		Financing		Total			Technology		Financing		Total
Sales
Product	$	720,210	$	38,007	$	758,217		$	663,367	$	27,529	$	690,896
Service		116,449		-		116,449			97,216		-		97,216
Net sales		836,659		38,007		874,666			760,583		27,529		788,112
Cost of Sales
Product		564,852		10,004		574,856			525,549		4,048		529,597
Service		71,296		-		71,296			60,996		-		60,996
Total cost of sales		636,148		10,004		646,152			586,545		4,048		590,593
Gross Profit		200,511		28,003		228,514			174,038		23,481		197,519
Selling, general, and administrative		136,956		6,323		143,279			128,142		8,214		136,356
Depreciation and amortization		7,723		56		7,779			6,801		56		6,857
Interest and financing costs		358		343		701			266		558		824
Operating expenses		145,037		6,722		151,759			135,209		8,828		144,037
Operating income		55,474		21,281		76,755			38,829		14,653		53,482
Other income (expense)						(202	)						282
Earnings before tax					$	76,553						$	53,764
Net Sales
Contracts with customers	$	826,880	$	7,194	$	834,074		$	746,344	$	1,988	$	748,332
Financing and other		9,779		30,813		40,592			14,239		25,541		39,780
Net Sales	$	836,659	$	38,007	$	874,666		$	760,583	$	27,529	$	788,112
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	8,177	$	3,867	$	12,044		$	7,133	$	2,327	$	9,460
Purchases of property, equipment and operating lease equipment	$	2,255	$	13,988	$	16,243		$	3,101	$	166	$	3,267
Selected Financial Data - Balance Sheet
Total assets	$	902,070	$	237,875	$	1,139,945		$	812,633	$	226,078	$	1,038,711

Technology Segment Disaggregation of Revenue

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized for the three and six month periods ended September 30, 2021, and 2020 in the tables below (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020
Customer end market:
Telecom, Media & Entertainment	$	115,784		$	96,927		$	227,976		$	153,579
Technology		53,752			76,321			122,892			146,288
State and local government and educational institutions		68,662			76,492			134,077			147,055
Healthcare		88,237			59,252			142,925			105,788
Financial Services		37,036			46,732			67,047			94,153
All others		72,830			63,635			141,742			113,720
Net sales		436,301			419,359			836,659			760,583
Less: Revenue from financing and other		(5,962	)		(7,002	)		(9,779	)		(14,239	)
Revenue from contracts with customers	$	430,339		$	412,357		$	826,880		$	746,344

	Three Months Ended September 30,						Six Months Ended September 30,
	2021			2020			2021			2020
Vendor
Cisco Systems	$	174,072		$	173,166		$	340,974		$	301,098
Dell / EMC		43,498			15,349			69,838			46,430
Juniper Networks		18,438			24,716			43,152			38,295
HP Inc. & HPE		14,038			16,395			31,240			33,433
Arista Networks		8,047			13,443			19,545			20,263
NetApp		29,536			9,914			39,993			25,335
All others		148,672			166,376			291,917			295,729
Net sales		436,301			419,359			836,659			760,583
Less: Revenue from financing and other		(5,962	)		(7,002	)		(9,779	)		(14,239	)
Revenue from contracts with customers	$	430,339		$	412,357		$	826,880		$	746,344

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net Sales [Member] | Product Concentration Risk [Member] | Cisco Systems [Member] | Technology Segment [Member]
Concentration of risk [Abstract]
Percentage of concentration risk	40.00%	41.00%	41.00%	40.00%

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REVENUES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2021
Contract with Customer, Asset and Liability [Abstract]
Accounts receivable - trade	$ 53,800		$ 53,800		$ 54,600
Current (included in deferred revenue)	82,184		82,184		72,299
Non-current (included in other liabilities)	27,813		27,813		$ 26,042
Revenue recognized from the beginning contract liability	14,600	$ 11,300	36,100	$ 26,900
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	67,947		67,947
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 26,309		$ 26,309
Expected timing of satisfaction, period	6 months		6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 24,656		$ 24,656
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 12,595		$ 12,595
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 2,920		$ 2,920
Expected timing of satisfaction, period	1 year		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 1,467		$ 1,467
Expected timing of satisfaction, period

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FINANCING RECEIVABLES AND OPERATING LEASES (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Sep. 30, 2021		Sep. 30, 2020	Sep. 30, 2021		Sep. 30, 2020	Mar. 31, 2021		Mar. 31, 2020
Profit Recognized for Sales-type Leases [Abstract]
Net sales		$ 5,962		$ 7,655	$ 9,779		$ 17,818
Cost of sales		4,926		5,402	8,291		10,729
Gross Profit		1,036		2,253	1,488		7,089
Interest Income on Sales-type Leases [Abstract]
Interest Income on sales-type leases		1,000		1,884	2,290		4,103
Lease income on operating leases		6,634		3,900	11,844		7,738
Financing Receivables [Abstract]
Unguaranteed residual value		8,081			8,081			$ 9,453
Initial direct costs, net of amortization		271			271			425
Allowance for credit losses		(4,475)		(4,894)	(4,475)		(4,894)	(4,447)		$ (3,189)
Reported as [Abstract]
Current		80,082			80,082			106,272
Future scheduled minimum lease payments [Abstract]
Unguaranteed residual value for sales-type leases		8,081			8,081			9,453
Investment in operating lease equipment - net [Abstract]
Cost of equipment under operating leases		34,082			34,082			18,748
Accumulated depreciation		(10,700)			(10,700)			(7,870)
Investment in operating lease equipment - net	[1]	23,382			23,382			10,878
Unguaranteed residual value of operating lease equipment net		4,600			4,600			2,500
Future scheduled minimum lease rental payments [Abstract]
Collateral for non-recourse notes payable - Finance receivables		22,600			22,600			60,500
Collateral for non-recourse notes payable - Operating leases		8,100			8,100			3,300
Gain on sale of financing receivables		10,100		4,500	13,300		7,000
Proceeds from sale of financing receivables		615,000		118,500	690,300		191,700
Contract liabilities - servicing of financial assets		500			500			300
Notes Receivables [Member]
Financing Receivables [Abstract]
Gross receivables		104,066			104,066			112,641
Unguaranteed residual value		0	[2]		0	[2]		0	[3]
Initial direct costs, net of amortization		271			271			425
Unearned income		0			0			0
Allowance for credit losses		(1,687)	[4]	(1,337)	(1,687)	[4]	(1,337)	(1,212)	[4]	(798)
Total, net		102,650			102,650			111,854
Reported as [Abstract]
Current		55,928			55,928			73,175
Long-term		46,722			46,722			38,679
Total, net		102,650			102,650			111,854
Lease Receivables [Member]
Financing Receivables [Abstract]
Gross receivables		54,261			54,261			68,393
Unguaranteed residual value		13,411	[2]		13,411	[2]		14,876	[3]
Initial direct costs, net of amortization		0			0			0
Unearned income		(7,095)			(7,095)			(8,393)
Allowance for credit losses		(672)	[4]	$ (1,227)	(672)	[4]	$ (1,227)	(1,171)	[4]	$ (610)
Total, net		59,905			59,905			73,705
Reported as [Abstract]
Current		24,154			24,154			33,097
Long-term		35,751			35,751			40,608
Total, net		59,905			59,905			73,705
Financing Receivables [Member]
Financing Receivables [Abstract]
Gross receivables		158,327			158,327			181,034
Unguaranteed residual value		13,411	[2]		13,411	[2]		14,876	[3]
Initial direct costs, net of amortization		271			271			425
Unearned income		(7,095)			(7,095)			(8,393)
Allowance for credit losses	[4]	(2,359)			(2,359)			(2,383)
Total, net		162,555			162,555			185,559
Reported as [Abstract]
Current		80,082			80,082			106,272
Long-term		82,473			82,473			79,287
Total, net		$ 162,555			$ 162,555			$ 185,559

[1] Amounts include estimated unguaranteed residual values of $4.6 million and $2.5 million as of September 30, 2021, and March 31, 2021, respectively.

[2] Includes unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable.

[3] Includes unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable.

[4] Refer to Note 6, “Allowance for Credit Losses” for details.

XML

LESSEE ACCOUNTING (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Lessee, Operating Lease [Abstract]
Rent expense	$ 1.3	$ 1.5	$ 2.6	$ 3.1
Maximum [Member]
Lessee, Operating Lease [Abstract]
Operating lease term	6 years		6 years

XML

GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill (Details) $ in Thousands	6 Months Ended
	Sep. 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	(49)
Goodwill, Ending Balance	135,269
Goodwill, Impairment Loss, Ending Balance	(8,673)
Goodwill, Net Carrying Amount, Ending Balance	$ 126,596
Number of reporting units | Unit	1

XML

GOODWILL AND OTHER INTANGIBLE ASSETS, Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2021
Other Intangible Assets [Abstract]
Gross carrying amount	$ 87,772		$ 87,772		$ 87,888
Accumulated amortization	(55,208)		(55,208)		(49,274)
Net carrying amount	32,564		32,564		38,614
Customer Relationships and Other Intangibles [Member]
Other Intangible Assets [Abstract]
Gross carrying amount	77,281		77,281		77,335
Accumulated amortization	(47,424)		(47,424)		(42,115)
Net carrying amount	29,857		29,857		35,220
Total amortization expense	3,000	$ 2,500	$ 6,000	$ 5,000
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	10,491		$ 10,491		10,553
Accumulated amortization	(7,784)		(7,784)		(7,159)
Net carrying amount	$ 2,707		$ 2,707		$ 3,394
Capitalized Software Development [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life			5 years

XML

ALLOWANCE FOR CREDIT LOSSES, Activity (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2021		Sep. 30, 2020
Activity in reserves for credit losses [Roll Forward]
Balance	$ 4,447		$ 3,189
Provision for credit losses	98		1,766
Write-offs and other	(70)		(61)
Balance	4,475		4,894
Accounts Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	2,064		1,781
Provision for credit losses	116		576
Write-offs and other	(64)		(27)
Balance	2,116		2,330
Notes Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,212	[1]	798
Provision for credit losses	479		566
Write-offs and other	(4)		(27)
Balance	1,687	[1]	1,337
Lease Receivables [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,171	[1]	610
Provision for credit losses	(497)		624
Write-offs and other	(2)		(7)
Balance	$ 672	[1]	$ 1,227

[1] Refer to Note 6, “Allowance for Credit Losses” for details.

XML

ALLOWANCE FOR CREDIT LOSSES, Amortized Cost Basis (Details) - USD ($) $ in Thousands		6 Months Ended
		Sep. 30, 2021		Mar. 31, 2021
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		$ 74,067	[1]	$ 153,825	[2]
2021/2020		68,158	[1]	18,085	[2]
2020/2019		10,879	[1]	4,458	[2]
2019/2018		2,840	[1]	1,512	[2]
2018/2017		538	[1]	184	[2]
2017	[1]	80
Total		156,562	[1]	178,064	[2]
Transfers	[3]	(50,211)	[1]	(78,427)	[2]
Net credit exposure		106,351	[1]	99,637	[2]
Unguaranteed residual value		8,081		9,453
Lease receivable and initial direct costs of notes receivable, net of amortization		271		425
Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		50,948		101,482
2021/2020		47,336		8,718
2020/2019		4,360		1,643
2019/2018		1,183		779
2018/2017		229		19
2017		10
Total		104,066		112,641
Transfers	[3]	(37,659)		(66,367)
Net credit exposure		66,407		46,274
Unguaranteed residual value		0	[4]	0	[5]
Lease receivable and initial direct costs of notes receivable, net of amortization		271		425
Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		23,119		52,343
2021/2020		20,822		9,367
2020/2019		6,519		2,815
2019/2018		1,657		733
2018/2017		309		165
2017		70
Total		52,496		65,423
Transfers	[3]	(12,552)		(12,060)
Net credit exposure		39,944		53,363
Unguaranteed residual value		13,411	[4]	14,876	[5]
Lease receivable and initial direct costs of notes receivable, net of amortization		$ 0		0
High CQR [Member] | Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		1.00%
High CQR [Member] | Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		$ 38,015		93,793
2021/2020		42,542		6,250
2020/2019		2,256		769
2019/2018		517		771
2018/2017		226		19
2017		10
Total		83,566		101,602
Transfers	[3]	(35,004)		(63,471)
Net credit exposure		48,562		38,131
High CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		12,716		28,898
2021/2020		10,504		5,885
2020/2019		4,253		1,798
2019/2018		1,424		463
2018/2017		168		125
2017		48
Total		29,113		37,169
Transfers	[3]	(6,911)		(7,468)
Net credit exposure		$ 22,202		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		$ 12,933		7,689
2021/2020		4,794		2,468
2020/2019		2,104		550
2019/2018		342		8
2018/2017		3		0
2017		0
Total		20,176		10,715
Transfers	[3]	(2,655)		(2,896)
Net credit exposure		17,521		7,819
Average CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		8,906		23,445
2021/2020		9,261		3,482
2020/2019		2,266		1,017
2019/2018		233		270
2018/2017		141		40
2017		22
Total		20,829		28,254
Transfers	[3]	(5,641)		(4,592)
Net credit exposure		$ 15,188		23,662
Low CQR [Member] | Minimum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		10.00%
Low CQR [Member] | Maximum [Member]
Credit Risk Profile, Segregated by Class [Abstract]
Loss rate on credit quality rating		100.00%
Low CQR [Member] | Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021		$ 0		0
2021/2020		0		0
2020/2019		0		324
2019/2018		324		0
2018/2017		0		0
2017		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		1,497		0
2021/2020		1,057		0
2020/2019		0		0
2019/2018		0		0
2018/2017		0		0
2017		0
Total		2,554		0
Transfers	[3]	0		0
Net credit exposure		$ 2,554		$ 0

[1] Unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $271 thousand are excluded from amortized cost.

[2] Unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $425 thousand are excluded from amortized cost.

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

[4] Includes unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable.

[5] Includes unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable.

XML

ALLOWANCE FOR CREDIT LOSSES, Aging Analysis (Details) - USD ($) $ in Thousands	Sep. 30, 2021		Mar. 31, 2021
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	$ 13,783		$ 9,616
Unbilled	142,779		168,448
Total	156,562	[1]	178,064	[2]
Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	9,761		5,471
Unbilled	94,305		107,170
Total	104,066		112,641
Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	4,022		4,145
Unbilled	48,474		61,278
Total	52,496		65,423
Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	4,566		3,810
Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	3,024		2,231
Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,542		1,579
31 to 60 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	976		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	653		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	323		804
61 to 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	2,151		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	1,658		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	493		132
> 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,439		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	713		673
> 90 Days Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	726		643
Current [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	9,217		5,806
Current [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	6,737		3,240
Current [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	$ 2,480		$ 2,566

[1] Unguaranteed residual values of $8,081 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $271 thousand are excluded from amortized cost.

[2] Unguaranteed residual values of $9,453 thousand that we retained after selling the related lease receivable and initial direct costs of notes receivable of $425 thousand are excluded from amortized cost.

XML

PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Mar. 31, 2021
Other current assets [Abstract]
Deposits & funds held in escrow	$ 453	$ 759
Prepaid assets	11,703	9,939
Other	519	278
Total	12,675	10,976
Property, equipment and other assets [Abstract]
Property and equipment, net	7,368	7,388
Deferred costs - non-current	19,770	19,063
Right-of-use assets	7,562	8,763
Other	9,195	7,075
Total	$ 43,895	$ 42,289
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Total	Total
Other current liabilities [Abstract]
Accrued expenses	$ 13,856	$ 13,598
Accrued income taxes payable	2,146	4,439
Short-term lease liability	3,835	3,934
Other	12,695	8,090
Total	$ 32,532	$ 30,061
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Total	Total
Other liabilities [Abstract]
Deferred revenue - non-current	$ 28,174	$ 26,309
Long-term lease liability	3,816	5,040
Other	5,052	5,330
Total	$ 37,042	$ 36,679
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Total	Total

XML

CREDIT FACILITY AND NOTES PAYABLE (Details) $ in Millions	6 Months Ended
	Sep. 30, 2021 USD ($) Component	Oct. 13, 2021 USD ($)	Mar. 31, 2021 USD ($)
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility	$ 350.0
Notes Payable [Member] | Recourse [Member]
Notes Payable [Abstract]
Long-term Debt	$ 44.9
Weighted average interest rate of notes	3.50%		3.50%
Notes Payable [Member] | Recourse [Member] | Note Payable One Installment Arrangement [Member]
Notes Payable [Abstract]
Long-term Debt	$ 15.9
Notes Payable [Member] | Non-recourse [Member]
Notes Payable [Abstract]
Long-term Debt	$ 25.4		$ 56.1
Weighted average interest rate of notes	3.59%		3.35%
2021 Credit Facility [Member] | Subsequent Event [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility		$ 375.0
Revolving Credit Facility [Member] | Subsequent Event [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility		$ 100.0
Revolving Credit Facility [Member] | Notes Payable [Member] | Recourse [Member]
Notes Payable [Abstract]
Long-term Debt	$ 29.0
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	$ 145.9		$ 98.7
WFCDF [Member] | Account Receivable Component [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility	$ 100.0
Basis spread on reference rate	2.00%
Amount outstanding under credit facility	$ 29.0		$ 0.0
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

XML

EARNINGS PER SHARE, Calculation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Share, Basic and Diluted [Abstract]
Net earnings attributable to common shareholders - basic and diluted	$ 31,413	$ 23,518	$ 19,846	$ 17,360	$ 54,931	$ 37,206
Basic and diluted common shares outstanding [Abstract]
Weighted average common shares outstanding - basic (in shares)	13,332		13,372		13,333	13,347
Effect of dilutive shares (in shares)	100		19		98	47
Weighted average shares common outstanding - diluted (in shares)	13,432		13,391		13,431	13,394
Earnings per common share - basic (in dollars per share)	$ 2.36		$ 1.48		$ 4.12	$ 2.79
Earnings per common share - diluted (in dollars per share)	$ 2.34		$ 1.48		$ 4.09	$ 2.78

XML

EARNINGS PER SHARE, Stock Split (Details) shares in Thousands			3 Months Ended		6 Months Ended
	Dec. 13, 2021	Nov. 09, 2021	Sep. 30, 2021 $ / shares shares	Sep. 30, 2020 $ / shares shares	Sep. 30, 2021 $ / shares shares	Sep. 30, 2020 $ / shares shares
Earnings per common share [Abstract]
Basic - pro forma (in dollars per share) | $ / shares			$ 1.18	$ 0.74	$ 2.06	$ 1.39
Diluted - pro forma (in dollars per share) | $ / shares			$ 1.17	$ 0.74	$ 2.04	$ 1.39
Weighted average common shares outstanding [Abstract]
Basic - pro forma (in shares) | shares			26,664	26,744	26,666	26,694
Diluted - pro forma (in shares) | shares			26,864	26,782	26,862	26,788
Forecast [Member]
Stock Split [Abstract]
Percentage of stock dividend	100.00%
Subsequent Event [Member]
Stock Split [Abstract]
Stock split, conversion ratio		2
Dividend payable, date to be paid		Dec. 13, 2021
Dividend payable, date of record		Nov. 29, 2021

XML

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	6 Months Ended
	Sep. 30, 2021	Sep. 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)	49,028	24,318
Common stock repurchased during the period	$ 4.3	$ 1.8
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

XML

SHARE-BASED COMPENSATION, Share-Based Plans (Details)	Sep. 30, 2021 shares
2012 Employee LTIP [Member]
Share-based Plans [Abstract]
Number of shares remaining to be granted (in shares)	0

XML

SHARE-BASED COMPENSATION, Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Sep. 30, 2021	Sep. 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)	84,254
Vested (in shares)	(92,093)
Nonvested at end of period (in shares)	175,539
Weighted Average Grant-date Fair Value [Roll Forward]
Nonvested at beginning of period (in dollars per share)	$ 74.97
Granted (in dollars per share)	92.99
Vested (in dollars per share)	78.12
Nonvested at end of period (in dollars per share)	$ 82.00
2017 Director LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	6,393	9,309
2012 Employee LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	77,861	89,873

XML

SHARE-BASED COMPENSATION, Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Compensation Expense [Abstract]
Total share-based compensation expense	$ 1,800	$ 1,800	$ 3,575	$ 3,648
401(k) Profit Sharing Plan [Abstract]
Contribution to profit sharing plan	1,000	$ 700	1,800	$ 1,400
Restricted Stock [Member]
Compensation Expense [Abstract]
Unrecognized compensation expense	$ 12,400		$ 12,400
Unrecognized compensation expense, period for recognition			33 months

XML

INCOME TAXES (Details) $ in Thousands	6 Months Ended
	Sep. 30, 2021 USD ($)
INCOME TAXES [Abstract]
Additions or reductions to gross unrecognized tax benefits	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Mar. 31, 2021
Assets [Abstract]
Money market funds	$ 136	$ 45,134
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Money market funds	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

XML

BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Dec. 31, 2020	Mar. 31, 2021	Sep. 30, 2021
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Goodwill		$ 126,645	$ 126,596
Systems Management Planning, Inc. (SMP) [Member]
Business Combination [Abstract]
Cash portion of the acquisition	$ 29,000
Amount received 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, Inc. (SMP) [Member] | Customer Relationships [Member]
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Estimated useful lives			7 years

XML

SEGMENT REPORTING, Reportable Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) Segment	Sep. 30, 2020 USD ($)	Mar. 31, 2021 USD ($)
SEGMENT REPORTING [Abstract]
Number of business segments | Segment			2
Reportable Segment Information [Abstract]
Net sales	$ 458,017	$ 433,081	$ 874,666	$ 788,112
Cost of Sales [Abstract]
Cost of sales	335,015	334,119	646,152	590,593
Gross profit	123,002	98,962	228,514	197,519
Selling, general, and administrative	74,504	66,889	143,279	136,356
Depreciation and amortization	3,853	3,341	7,779	6,857
Interest and financing costs	342	247	701	824
Operating expenses	78,699	70,477	151,759	144,037
Operating income	44,303	28,485	76,755	53,482
Other income (expense)	(325)	184	(202)	282
Earnings before tax	43,978	28,669	76,553	53,764
Net Sales [Abstract]
Contracts with customers	432,115	413,385	834,074	748,332
Financing and other	25,902	19,696	40,592	39,780
Net sales	458,017	433,081	874,666	788,112
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	5,962	4,681	12,044	9,460
Purchases of property, equipment and operating lease equipment	9,249	990	16,243	3,267
Selected Financial Data - Balance Sheet [Abstract]
Total assets	1,139,945	1,038,711	1,139,945	1,038,711	$ 1,076,775
Product [Member]
Reportable Segment Information [Abstract]
Net sales	397,160	383,656	758,217	690,896
Cost of Sales [Abstract]
Cost of sales	297,629	302,963	574,856	529,597
Net Sales [Abstract]
Net sales	397,160	383,656	758,217	690,896
Service [Member]
Reportable Segment Information [Abstract]
Net sales	60,857	49,425	116,449	97,216
Cost of Sales [Abstract]
Cost of sales	37,386	31,156	71,296	60,996
Net Sales [Abstract]
Net sales	60,857	49,425	116,449	97,216
Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	436,301	419,359	836,659	760,583
Net Sales [Abstract]
Contracts with customers	430,339	412,357	826,880	746,344
Financing and other	5,962	7,002	9,779	14,239
Net sales	436,301	419,359	836,659	760,583
Operating Segments [Member] | Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	436,301	419,359	836,659	760,583
Cost of Sales [Abstract]
Cost of sales	331,223	332,162	636,148	586,545
Gross profit	105,078	87,197	200,511	174,038
Selling, general, and administrative	70,803	62,586	136,956	128,142
Depreciation and amortization	3,825	3,313	7,723	6,801
Interest and financing costs	199	1	358	266
Operating expenses	74,827	65,900	145,037	135,209
Operating income	30,251	21,297	55,474	38,829
Net Sales [Abstract]
Contracts with customers	430,339	412,357	826,880	746,344
Financing and other	5,962	7,002	9,779	14,239
Net sales	436,301	419,359	836,659	760,583
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	4,074	3,499	8,177	7,133
Purchases of property, equipment and operating lease equipment	948	990	2,255	3,101
Selected Financial Data - Balance Sheet [Abstract]
Total assets	902,070	812,633	902,070	812,633
Operating Segments [Member] | Technology Segment [Member] | Product [Member]
Reportable Segment Information [Abstract]
Net sales	375,444	369,934	720,210	663,367
Cost of Sales [Abstract]
Cost of sales	293,837	301,006	564,852	525,549
Net Sales [Abstract]
Net sales	375,444	369,934	720,210	663,367
Operating Segments [Member] | Technology Segment [Member] | Service [Member]
Reportable Segment Information [Abstract]
Net sales	60,857	49,425	116,449	97,216
Cost of Sales [Abstract]
Cost of sales	37,386	31,156	71,296	60,996
Net Sales [Abstract]
Net sales	60,857	49,425	116,449	97,216
Operating Segments [Member] | Financing Segment [Member]
Reportable Segment Information [Abstract]
Net sales	21,716	13,722	38,007	27,529
Cost of Sales [Abstract]
Cost of sales	3,792	1,957	10,004	4,048
Gross profit	17,924	11,765	28,003	23,481
Selling, general, and administrative	3,701	4,303	6,323	8,214
Depreciation and amortization	28	28	56	56
Interest and financing costs	143	246	343	558
Operating expenses	3,872	4,577	6,722	8,828
Operating income	14,052	7,188	21,281	14,653
Net Sales [Abstract]
Contracts with customers	1,776	1,028	7,194	1,988
Financing and other	19,940	12,694	30,813	25,541
Net sales	21,716	13,722	38,007	27,529
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	1,888	1,182	3,867	2,327
Purchases of property, equipment and operating lease equipment	8,301	0	13,988	166
Selected Financial Data - Balance Sheet [Abstract]
Total assets	237,875	226,078	237,875	226,078
Operating Segments [Member] | Financing Segment [Member] | Product [Member]
Reportable Segment Information [Abstract]
Net sales	21,716	13,722	38,007	27,529
Cost of Sales [Abstract]
Cost of sales	3,792	1,957	10,004	4,048
Net Sales [Abstract]
Net sales	21,716	13,722	38,007	27,529
Operating Segments [Member] | Financing Segment [Member] | Service [Member]
Reportable Segment Information [Abstract]
Net sales	0	0	0	0
Cost of Sales [Abstract]
Cost of sales	0	0	0	0
Net Sales [Abstract]
Net sales	$ 0	$ 0	$ 0	$ 0

XML

SEGMENT REPORTING, Technology Segment Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Abstract]
Net sales	$ 458,017	$ 433,081	$ 874,666	$ 788,112
Less: Revenue from financing and other	(25,902)	(19,696)	(40,592)	(39,780)
Revenue from contracts with customers	432,115	413,385	834,074	748,332
Technology Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	436,301	419,359	836,659	760,583
Less: Revenue from financing and other	(5,962)	(7,002)	(9,779)	(14,239)
Revenue from contracts with customers	430,339	412,357	826,880	746,344
Technology Segment [Member] | Telecom, Media & Entertainment [Member]
Disaggregation of Revenue [Abstract]
Net sales	115,784	96,927	227,976	153,579
Technology Segment [Member] | Technology [Member]
Disaggregation of Revenue [Abstract]
Net sales	53,752	76,321	122,892	146,288
Technology Segment [Member] | State and Local Government and Educational Institutions [Member]
Disaggregation of Revenue [Abstract]
Net sales	68,662	76,492	134,077	147,055
Technology Segment [Member] | Health Care [Member]
Disaggregation of Revenue [Abstract]
Net sales	88,237	59,252	142,925	105,788
Technology Segment [Member] | Financial Services [Member]
Disaggregation of Revenue [Abstract]
Net sales	37,036	46,732	67,047	94,153
Technology Segment [Member] | All Others [Member]
Disaggregation of Revenue [Abstract]
Net sales	72,830	63,635	141,742	113,720
Technology Segment [Member] | Cisco Systems [Member]
Disaggregation of Revenue [Abstract]
Net sales	174,072	173,166	340,974	301,098
Technology Segment [Member] | Dell / EMC [Member]
Disaggregation of Revenue [Abstract]
Net sales	43,498	15,349	69,838	46,430
Technology Segment [Member] | Juniper Networks [Member]
Disaggregation of Revenue [Abstract]
Net sales	18,438	24,716	43,152	38,295
Technology Segment [Member] | HP Inc. & HPE [Member]
Disaggregation of Revenue [Abstract]
Net sales	14,038	16,395	31,240	33,433
Technology Segment [Member] | Arista Networks [Member]
Disaggregation of Revenue [Abstract]
Net sales	8,047	13,443	19,545	20,263
Technology Segment [Member] | NetApp [Member]
Disaggregation of Revenue [Abstract]
Net sales	29,536	9,914	39,993	25,335
Technology Segment [Member] | All Others [Member]
Disaggregation of Revenue [Abstract]
Net sales	$ 148,672	$ 166,376	$ 291,917	$ 295,729