10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended March 31, 2022

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 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

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.

Yes ☐  No ☒

 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 229.405 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:

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

Yes ☐  No ☒

The aggregate market value of the common stock held by non-affiliates of ePlus, computed by reference to the closing price at which the stock was sold as of September 30, 2021, was $1,355,245,489. The outstanding number of shares of common stock of ePlus as of May 23, 2022, was 26,818,561.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference into the indicated parts of this Form 10-K:

Portions of the Company’s definitive Proxy Statement relating to its 2022 annual meeting of stockholders (the “2022 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2022 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the Company’s fiscal year end to which this report relates.

Table of Contents

		Page
Cautionary Language About Forward-Looking Statements		1
Part I
Item 1.	Business	3
	Executive Officers	13
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	25
Item 6.	[RESERVED]	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	44
Item 9A.	Controls and Procedures	44
Item 9B.	Other Information	45
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	45
Item 11.	Executive Compensation	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	46
Item 13.	Certain Relationships and Related Transactions, and Director Independence	46
Item 14.	Principal Accounting Fees and Services	46
Part IV
Item 15.	Exhibits and Financial Statement Schedules	46
Item 16.	Form 10-K Summary	48
Signatures		49

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K 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, and court opinions concerning the legality thereof, 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 inflation, including increases in our costs and price increases to our customers which may result in adverse changes in our gross profit;

• significant and rapid inflation may cause price, wage, and interest rate increases, as well as increases in operating costs which may impact the arrangements that have pricing commitments over the term of the agreement;

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

• supply chain issues, including a shortage of IT products, may increase our costs or cause a delay in fulfilling customer orders, or completing professional services, or purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results;

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

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

• our ability to secure our own and our customers’ electronic and other confidential information, while maintaining compliance with evolving data privacy and regulatory laws and regulations;

• remain secure during a cybersecurity attack, including both disruptions in our or our vendors’ IT systems and data and audio communication networks;

• reliance on third parties to perform some of our service obligations to our customers, and the reliance on a small number of key vendors in our supply chain with whom we do not have long-term supply agreements, guaranteed price agreements, or assurance of stock availability;

• 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;

• 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;

• reduction of vendor incentives provided to us;

• 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;

• future growth rates in our core businesses;

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

• the possibility of goodwill impairment charges in the future;

• 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;

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

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

• performing professional and managed services competently;

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

• exposure to changes in, interpretations of, or enforcement trends in, and customer and vendor actions in anticipation of or response to, legislation and regulatory matters;

• domestic and international economic regulations uncertainty (e.g., tariffs, sanctions, 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;

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

• 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”).

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PART I

ITEM 1. BUSINESS

GENERAL

ePlus inc., sometimes referred to in this Annual Report on Form 10-K as “we,” “our,” “us,” “ourselves,” or “ePlus.”, was founded in 1990. We conduct our operations through two business segments. Our technology segment sells IT hardware products, third-party software and maintenance contracts, our own and third-party advanced professional and managed services, and our proprietary software. Our financing segment operations primarily consist of the financing of IT equipment, software, and related services. Both segments sell to commercial entities, state and local governments, government contractors, and educational institutions.

OUR BUSINESS

We are a leading solutions provider that delivers actionable outcomes for organizations by using IT and consulting solutions to drive business agility and innovation. Leveraging our engineering talent, we assess, plan, deliver, and secure solutions comprised of leading technologies and consumption models aligned with our customers’ needs. Our expertise and experience enable ePlus to craft optimized solutions that take advantage of the cost, scale, and efficiency of private, public and hybrid cloud in an evolving market. We also provide consulting, professional, and managed services, 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 over 31 years.

Our primary focus is to deliver secure integrated solutions that address our customers’ business needs, leveraging the appropriate technologies, both on-premise and in the cloud while mitigating risk. 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, DevSecOps, zero-trust architectures, data management, data visualization, analytics, network modernization, edge compute and other advanced and emerging technologies. These solutions are comprised of world class leading technologies from partners such as Amazon Web Services, Arista Networks, Check Point, Cisco Systems, Citrix, Commvault, Crowdstrike, 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 technologies that enable us to offer multi-vendor IT solutions that are optimized for each of our customers’ specific requirements. Our cloud/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. These solutions have expanded to include private marketplace experiences to our customers such as those on AWS.

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 “as-a-service”, 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 bespoke 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. For the year ended March 31, 2022, the percentage of revenue by customer end market within our technology segment includes 29% for the telecommunications, media and entertainment industry, 16% for healthcare, 14% for the technology industry, 14% for state and local government, and educational institutions (“SLED”), and 9% for financial services. Sales to Verizon Communications Inc. represented 24%, 19%, and 15% of our net sales for the years ended March 31, 2022, 2021, and 2020, respectively. 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, Singapore, and Israel. Our technology segment accounted for 95% of our net sales, and 74% of our operating income, while our financing segment accounted for 5% of our net sales, and 26% of our operating income for the year ended March 31, 2022.

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OUR INDUSTRY BACKGROUND AND MARKET OPPORTUNITY

We have identified and focused on several specific trends that we believe will create higher growth in the broader US IT market:

MULTI-CLOUD STRATEGY

Over the past several years, public, private and hybrid cloud architectures and cloud-enabled frameworks have become a core foundation of modern IT. Our strategy is to assist our customers in aligning cloud strategy with business objective, creating an enterprise cloud foundation, enabling multi-cloud capabilities, accelerating cloud migrations, modernizing the datacenter, and extending capabilities to the cloud, and optimizing cloud deployments along with their associated costs and security. We focus on being a guide to customers on their Journey to Modernization of applications, data, and platforms. This strategy leverages our strength in deploying private clouds, extending them to public cloud and incorporating the necessary elements of networking, security, and automation. By understanding our customers’ environment, applications, and business requirements, we deploy solutions that leverage the most appropriate technology on the most appropriate platform with the most appropriate consumption model. For example, we may build a private cloud solution to host mission critical applications, while utilizing a public cloud solution for development, collaboration, or disaster recovery. As the market matures, we will continue to build and acquire skills that align with agile development (DevOps), application refactoring, and analytics. Our cloud strategy is tightly aligned with all our key strategic initiatives, including data center, security, networking, collaboration, and emerging technology.

INCREASING SOPHISTICATION AND INCIDENCES OF IT SECURITY BREACHES AND CYBER-ATTACKES

Over the last decade, cyber-attacks have become more sophisticated, numerous, and invasive. Organizations are finding it increasingly difficult to effectively safeguard their information assets and business operations from a constant stream of advanced threats. Cyber-threats have shifted from uncoordinated individual efforts to highly coordinated and well-funded attacks by criminal organizations and nation-state actors. Additional drivers include data privacy concerns of both user data and machine data as companies continue to pursue digital transformation via data science and analytics. We believe our customers are focused on maturing all aspects of cyber security, including information and physical security, data protection, threat management and compliance requirements related to industry and government regulations. To meet current and future security threats, enterprises must identify their risks, select, and implement security controls and technology solutions that leverage integrated products and services to help monitor, mitigate, and remediate security threats and attacks while ensuring a data-centric security model that is scalable to meet today’s digital demands on premise, at the edge and in the cloud. Our ability to provide value-added and expert services to our customers in these areas helps us to create greater value for the customer via a security posture that extends across all digital technologies within an organization. The complex nature of security controls and their consumption opens opportunity for ePlus to engage in recurring subscription models with our customers that include both technology and the operational services designed and executed to help mitigate risk and mature an organizations’ cyber security posture.

DISRUPTIVE TECHNOLOGIES ARE CREATING COMPLEXITY AND CHALLENGES FOR CUSTOMERS AND VENDORS

The rapid evolution of disruptive technologies, and the speed by which they impact organizations’ IT platforms, has made it difficult for customers to effectively design, procure, implement, and manage their own IT systems. Disruption also increases the likelihood of security gaps leaving organizations vulnerable to attacks both internal and external. Moreover, increased budget pressures, fewer internal resources, a fragmented vendor landscape and fast time-to-value expectations make it challenging for customers to design, implement and manage secure, efficient, and cost-effective IT environments. Customers are increasingly turning to IT solutions providers such as ePlus to implement complex IT offerings, including managed services, security architecture, software-defined infrastructure, cloud platforms, converged and hyper-converged infrastructures, big data analytics, and data protection.

CUSTOMER IT DECISION-MAKING IS SHIFTING FROM IT DEPARTMENTS TO LINE-OF-BUSINESS PERSONNEL

As IT consumption shifts from legacy, on-premise infrastructure purchased upfront to agile “on-demand” and “as-a-service” solutions, customer procurement decisions are shifting from traditional IT personnel to lines-of-business personnel, which is changing the customer engagement model and types of consultative services required to fulfill customer needs. Many of these service delivery models are beginning to transition to recurring annuity revenue streams payable over time, rather than upfront revenue. Our partners are also evolving by developing more annuity models through subscription and consumption-based models operating both on-premises and the cloud, which further enables our offerings.

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LACK OF SUFFICIENT INTERNAL IT RESOURCES AT MID-SIZED AND LARGE ENTERPRISES, AND SCARCITY OF IT PERSONNEL IN CERTAIN HIGH-DEMAND DISCIPLINES

We believe that IT departments at mid-sized and large enterprises are facing pressure to deliver business outcomes that rely on emerging technologies but lack the properly-trained staff and the ability to hire personnel with high in-demand disciplines such as security and data analytics. At the same time the prevalence of security threats, increased use of cloud platforms, software-defined networking, new architectures, rapid software development frameworks, the proliferation of mobile devices, dispersed workforces, employees working from home, bring-your-own-device (BYOD) policies, and complexity of multi-vendor solutions have made it difficult for IT departments to implement high-quality IT solutions.

REDUCTION IN THE NUMBER OF IT SOLUTIONS PROVIDERS

We believe that customers are seeking to reduce the number of solutions providers they do business with to improve supply chain and internal efficiencies, enhance accountability, improve supplier management practices, and reduce costs. As a result, customers are required to select IT solutions providers that can deliver complex multi-vendor IT solutions. Vendor and tooling consolidation is also trending whereby solutions providers can bundle and enhance the value of offerings while simplifying technology footprints.

INCREASING NEED FOR THIRD-PARTY SERVICES

We believe that customers are relying on third-party service providers, such as ePlus, to manage significant aspects of their IT environment, from design, implementation, pre- and post-sales support, to maintenance, engineering, cloud management, security operations, and other services.

COMPETITION

The market for IT solutions is highly competitive, subject to macro-economic cycles, and the entry of new competitors. Additionally, the market is subject to disruption from consolidation of existing market participants that will create larger competitors, by the introduction of disruptive technologies, and by other activities of industry participants. We expect to continue to compete in all areas of our business against local, regional, national, and international firms, including vendors, consulting firms, international, national, and regional resellers, and service providers. Some of our competitors are direct marketers with little value-add and sell products as commodities, which can place downward pressure on product pricing. In addition, many IT vendors may sell or lease directly to our customers, and our continued ability to compete effectively may be affected by the policies of such vendors. Some Original Equipment Manufacturers (OEMs) are building and launching their own adoption and managed services to better ensure customer satisfaction and retainment. We face indirect competition from potential customers’ reluctance to move away from legacy systems, processes, and solutions providers. As IT consumption shifts from IT personnel and legacy infrastructure to line-of-business based outcomes using off-premise, on-demand, and cloud solutions, the legacy resale model is shifting from an upfront sale to a recurring revenue model.

The leasing and financing markets are also competitive and subject to changing economic conditions and market activities of leading industry participants. We expect to continue to compete against local, regional, national, and international firms, including banks, specialty finance companies, private-equity asset managers, vendors’ captive finance companies, and third-party leasing companies. Banks and other large financial services companies sell directly to business customers, particularly larger enterprise customers, and may provide other financial or ancillary services that we do not provide. Vendor captive leasing companies may use internal transfer pricing to effectively lower lease rates and/or bundle equipment sales and leasing to provide highly competitive packages to customers. Third-party leasing companies may have deep customer relationships with contracts in place that are difficult to displace; however, these competitors typically do not provide the breadth of product, service, and software offerings that we provide to our customers. Our competitors also may have access to more capital to fund more originations than us and may be better able to adapt to a rapidly changing interest rate environment.

In all our markets, some of our competitors have longer operating histories and greater financial, technical, marketing, and other resources than we do. In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer requirements. Many current and potential competitors also have greater name recognition and engage in more extensive promotional marketing and advertising activities, offer more attractive terms to customers, and adopt more aggressive pricing policies than we do.

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OUR SOLUTIONS

TECHNOLOGY SEGMENT

• IT sales: Our offerings consist of hardware, perpetual and subscription software, maintenance, software assurance, and internally provided and outsourced services. We believe that our customers view technology purchases as integrated solutions, rather than discrete product and service categories, and the majority of our sales are derived from integrated solutions involving our customers’ data center, cloud, network, security, and collaboration infrastructure. We hold various technical and sales-related certifications from leading manufacturers and software publishers, which authorizes us to market their products and enables us to provide advanced professional and managed services. We actively engage with emerging vendors to offer their technologies to our customers. Our flexible platform and customizable catalogs facilitate the addition of new vendors’ products with minimal incremental effort.

• Advanced professional and managed services: We provide a range of advanced professional and managed services to help our customers improve productivity, profitability, and revenue growth while reducing operating costs. Our solutions and services include the following:

• Managed services proactively monitors and manages a broad range of technologies on-premises and in the cloud with services such as managed infrastructure, service desk, and Managed Power Protection. These solutions are built in a flexible subscription model to monitor, manage, and maximize business critical technologies—including cloud, security, data center, mobility, and collaboration based on a an ITIL Framework with SOC 1/2 and HIPAA accreditation;

• Professional services focus on cloud infrastructure, unified communications, collaboration, networking, storage, hyper-converged infrastructure, and virtual desktop infrastructure, supported by security and managed services solutions;

• Security solutions help safeguard our customers’ business and information assets through the appropriate application of governance, technology and supporting services:

• Governance, Risk, and Compliance (GRC) services help ensure customers are meeting governance and compliance requirements by leveraging regulatory frameworks, industry best practices, and supporting controls - thereby allowing customers to effectively identify, assess, and mitigate risk.

• Technology Introduction and Deployment services help customers rapidly adopt and integrate key security controls and embrace efficiencies across technology types like network, endpoint, data, and cloud.

• Managed Security Services help customers strengthen their information security profile with industry-leading tools, technology, and expertise - often at a fraction of the cost of in-house security resources. Services include Security Operations Center (SOC), Vulnerability Management, Managed Detection and Response (MDR), and Incident Response (IR).

• Cloud Consulting Services is a global team of architects and consultants focused on assessing customer workloads for cloud, assisting with the selection of the appropriate cloud solution, design and build of cloud platforms, application modernization and migration, automation, and ongoing management and optimization of cloud platforms.

• Cloud Hosted Services provide cloud-hosted offerings including Cloud Managed Backup and Cloud Disaster Recovery. These data protection offerings, delivered under SOC 2 Type 2 and HIPAA frameworks, are focused on delivering confidence to our customers in their ability to rapidly recover when incidents such as ransomware occur.

• Staff augmentation services provide customers with flexible headcount options, which may range from service desk to infrastructure to software developer skills. Staff augmentation allows customers to access talent, fill specific technology skill gaps, or provide short-term or long-term IT professional help, which also includes services, such as Virtual Chief Information Officer (vCIO) and Virtual Chief Information Security Officer (vCISO), used to complement existing personnel and build three-to-five-year IT roadmaps.

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• Service desk provides outsourced functions including but not limited to server and desktop support to respond to our customers’ business demands while minimizing overhead.

• Project management services enhance productivity and collaboration management and enable successful implementations and adoption of solutions for our customers.

FINANCING SEGMENT

We specialize in financing arrangements, including sales-type and operating leases; loans, and consumption-based financing arrangements; and underwriting and management and disposal of IT equipment and assets. Our financing operations include sales, pricing, credit, contracts, accounting, risk management, and asset management.

We primarily finance IT equipment, communication-related equipment, and medical equipment. We may also finance industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment. We offer our solutions both directly and through vendors.

We offer enhanced financing solutions, and our business process services approach automates a significant portion of the IT procurement process and reduces our customers’ cost of doing business. The solution incorporates value-added services at every step in the process, including:

• Front-end processing, such as procurement, order aggregation, order automation, vendor performance measurement, ordering, reconciliation, and payment;

• Lifecycle and asset ownership services, including asset management, change management, and property tax filing; and

• End-of-life services such as equipment audit, removal, and disposal.

OUR COMPETITIVE STRENGTHS

BROAD SKILLSETS THAT CAN SCALE TO SUPPORT LARGE ADDRESSABLE MARKET

We sell IT solutions focusing on the data center, cloud, network, security, virtualization, and mobility segments of the industry, facilitated by our professional and managed service solutions. We primarily target our sales efforts toward middle-market and large commercial entities, state and local governments, education, and healthcare customers throughout the US and in certain markets in Europe and Asia. We believe IT departments in these organizations are facing pressure to deliver higher service levels with fewer resources, increasing their reliance on third-parties who can provide complex, multi-vendor technology solutions, such as our company.

BROAD AND DIVERSE CUSTOMER BASE ACROSS A WIDE RANGE OF END MARKETS

We have a broad and diverse customer base of over 3,500 customers across a wide range of end-markets, including education, financial services, healthcare, media and entertainment, state and local government, technology, and telecommunications.

DIFFERENTIATED BUSINESS MODEL SERVING ENTIRE IT LIFECYCLE – PROCUREMENT, SOLUTIONS, SERVICES, SOFTWARE, FINANCING

We believe we are a trusted IT advisor, delivering differentiated products and services to enable our customers to meet increasingly complex IT requirements. We are able to provide complete, turn-key solutions aligned to the entire IT lifecycle – procurement, products, services, software, and financing. We provide upfront assessments, design and configuration capabilities, installation and implementation, and ongoing services to support our customers’ solutions.

DEEP EXPERTISE IN ADVANCED TECHNOLOGY TO ADDRESS CLOUD, SECURITY, SOFTWARE DEFINED NETWORKING, WIFI/5G, AND OTHER EMERGING IT TRENDS

We believe our customers choose us for their complex IT infrastructure needs based on our track record of delivering best-of-breed solutions, value-added services, and close relationships with both established and emerging vendors. We focus on obtaining and maintaining top-level engineering certifications and professional services expertise in advanced technologies of strategic vendors that we leverage to help our customers achieve positive business outcomes. Across our company, our employees collectively hold nearly 5,000 certifications or accreditations. In particular, our highly skilled, experienced personnel include account executives, pre-sales and inside-sales staff trained on our broad solutions capabilities and category-focused subject-matter experts. Our approximately 375 technical employees hold nearly 3,000 certifications, with over 1,100 different titles, among over 100 vendors, with a heavy concentration in our top vendor partners.

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STRATEGIC ABILITY TO DESIGN AND INTEGRATE CLOUD SOLUTIONS ACROSS MULTIPLE VENDORS

We believe our expertise across both data center and cloud architectures allows us to provide differentiated offerings in assisting our customers with their journey to the cloud. Combined with our established practices in networking and security, we are uniquely poised to help customers adopt a multi-cloud strategy utilizing our cloud cost management and FinOps framework to help overcome the inherent challenges. We leverage our strategic partnerships with leading vendors such as Amazon Web Services, Cisco Systems, Dell EMC, Hewlett Packard Enterprise, Microsoft, NetApp, Rubrik, and VMware in conjunction with our professional, managed and lifecycle services to help our customers achieve their desired business outcomes.

STRATEGIC INVESTMENTS IN EXPERIENCED CYBER SECURITY PRACTICIONERS TO GUIDE CUSTOMERS RISK MITIGATION STRATEGIES

We believe our organizational structure and resources in both security advisory services and technology teams best enable our consulting teams to deliver clear business outcomes for our customers looking to identify and mitigate risk to their organizations. While developing threats, new regulations and cyber liability insurance premiums continue to increase, putting pressure on stake holders and shareholders, we continue to invest in our service delivery capabilities and align with industry leading cyber security OEMs to help ensure our customers are accelerating their security programs and leveraging the latest capabilities to harden defenses and ensure preparedness against threats to their business.

PROVEN TRACK RECORD OF SUCCESSFULLY INTEGRATING ACQUISITIONS AND ACCELERATING GROWTH

We view acquisitions as an important factor in our strategic growth plan. Since 1997, we have successfully integrated nearly 30 acquisitions. Most recently, we have been active in tuck-in acquisitions to broaden our product offerings, sector reach, and geographic footprint.

We generally integrate acquired firms into the ePlus platform immediately, which allows us to maintain customer and vendor relationships, retain key employees from acquired firms, and accelerate growth.

We continue to review new acquisition opportunities to expand our global footprint and expand our offerings.

FINANCIAL PERFORMANCE CHARACTERIZED BY GROWTH AND PROFITABILITY

We have focused on achieving top-line revenue growth while maintaining industry-leading gross margins – with a compound annual growth rate of 6.4% on net sales and 9.3% for consolidated gross profit, respectively, from fiscal year 2018 to fiscal year 2022.

Through our organic expansion and acquisitions, we have increased our employee base by 26.7% from March 31, 2018 to March 31, 2022. The increase in our employee base has largely been in customer facing roles, which represented 91.3% of the total increase in headcount over the same period, as we continue to build our sales and services team while leveraging our operational infrastructure.

GROWTH STRATEGY

Our goal is to continue to grow as a leading provider of technology solutions. The key elements of our strategy include the following:

BE OUR CUSTOMERS’ PARTNER OF CHOICE FOR COMPREHENSIVE IT AND LIFECYCLE SOLUTIONS, INCLUDING CONSULTING, MANAGED AND PROFESSIONAL SERVICES, AND FINANCING

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We seek to become the primary provider of IT solutions and flexible financing solutions for each of our customers, whether on-premise, cloud, hybrid or as a service provider. We strive to provide excellent customer service, pricing, availability, and advanced professional and managed services in an efficient manner. We believe the increasing complexity of the IT ecosystem and the emergence of new technologies, vendors, licensing, and service options are factors that will lead to a growing demand from existing customers. We have many experienced pre-sales engineers who engage with customers about the most advanced technologies. Our account executives are trained on our broad solutions capabilities with access to many category-focused subject-matter experts, which allow them to sell in a consultative business outcome-based manner that increases the likelihood of cross-selling our solutions. Our account executives are supported by experienced and professional inside sales representatives. We believe that our bundled offerings are an important differentiating factor from our competitors.

We focus on gaining top-level engineering certifications and professional services expertise in advanced technologies of strategic vendors. This expertise helps our customers develop their cloud capabilities including private, public, and hybrid deployments. We provide virtual desktop infrastructure, unified communications, collaboration, networking, security, storage, big data, mobility, converged and hyper-converged infrastructures, and managed services offerings, all of which remain in high demand. We believe our ability to deliver advanced professional services provides benefits in two ways. First, we gain recognition and mindshare of our strategic vendor partners and become the “go-to” partner in selected regional markets as well as the national market. This significantly increases direct and referral sales opportunities for our products and services and allows us to offer competitive pricing levels. Second, within our existing and potential customer base, our advanced professional services are a key differentiator against competitors who cannot provide services or advanced services for these key technologies or across multiple vendor product lines.

Our managed services portfolio expanded this year to include Managed SDWAN, Service Desk, Carrier Expense Management, Cloud Cost Optimization, Vulnerability Management as a Service (VMaas), Managed Unified Communication Manager (UCM), Hyperflex, Nutanix and Aruba monitoring and management. We have further increased our breadth and depth of engineering expertise through the integration of recent acquisitions, supplementing our Cisco service offerings, expanding our Netapp Enhanced Maintenance Support (EMS) portfolio, and adding support for additional market leading security solutions. We have also enhanced our Managed Services and consolidated all ePlus annuity-based service solutions into a single service management platform to enhance customer experience. Likewise, we have increased automation of Service Level Target reporting to ensure remediation and response are top-of-mind.

BUILD OUR GEOGRAPHIC FOOTPRINT

We intend to increase our direct sales and go-to-market capabilities in each of our geographic areas. We actively seek to acquire new account relationships through personal relationships, electronic commerce, leveraging our partnerships with vendors, and targeted demand-generation activities to increase awareness of our solutions. We also seek to broaden our customer base, expand our geographic reach, and improve our technology and professional services delivery capabilities. During the last fiscal year, we continued to expand our sales and delivery capabilities across multiple international markets as we see more demand for solutions within this market.

RECRUIT, RETAIN, AND DEVELOP EMPLOYEES

Based on our prior experience, capital structure, and business systems and processes, we believe we are well positioned to hire experienced sales representatives and engineers, make strategic acquisitions that expand our customer facing talent, broaden our customer base, expand our geographic reach, scale our existing operating structure, and/or enhance our product and service offerings. While the current labor market is challenging, part of our growth strategy is to hire purposefully and enhance our technical and skill base through strategic acquisitions. Once recruited, we believe that that our culture, competitive performance-based compensation, policies, and labor practices contribute to strong relations with our employees. We offer a range of affordable and flexible benefits options to assist with health and well-being. As our employees are an important resource to us, we invest in their ongoing professional development. Our education program provides financial support for employees who want to participate in undergraduate and graduate studies, continuing education, skill building including technical certifications, and other professional enrichment related to their position with ePlus.

IMPROVE OPERATIONAL EFFICIENCIES

We continue to invest in our internal technology infrastructure and software platforms to optimize our operations and engage in process re-engineering efforts to become more streamlined and cost effective.

RESEARCH AND DEVELOPMENT

We incur software development costs associated with maintaining, enhancing, or upgrading our proprietary software, which may be performed by internal or external IT development resources or by an offshore software-development company that we use to supplement our internal development team or various US-based consultants.

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SALES AND MARKETING

We focus our sales and marketing efforts on becoming the primary provider of IT solutions for each of our customers. We actively seek to acquire new account relationships through personal relationships, electronic commerce, and leveraging our partnerships with vendors and targeted demand-generation activities to increase awareness of our solutions. We target middle-market and large commercial entities and state and local governments, and educational institutions. We undertake direct marketing and leverage digital marketing and social media campaigns to target certain markets in conjunction with our primary vendor partners, who may provide financial reimbursement, outsourced services, and personnel to assist us in these efforts.

Our sales representatives are compensated by a combination of salary and commission, with commission becoming the primary component of compensation as the sales representatives gain experience. To date, we acquired a majority of our customers through the efforts of our direct sales force and acquisitions. We market to different areas within a customer’s organization, including business units as well as the IT department, or finance department, depending on the solutions.

As of March 31, 2022, our sales force consisted of 588 sales, marketing and sales support personnel organized regionally across the US, UK, India, and Singapore.

INTELLECTUAL PROPERTY RIGHTS

Our success depends in part upon proprietary business methodologies and technologies that we have licensed and modified. We own certain software programs or have entered into software licensing agreements to provide services to our customers. We rely on a combination of copyrights, trademarks, service marks, trade secret protection, confidentiality and nondisclosure agreements, and licensing arrangements to establish and protect our intellectual property rights. We seek to protect our documentation and other written materials and confidential corporate information under trade secret and copyright laws, which afford only limited protection.

For example, we currently have patents in the US and Canada. We cannot provide assurance that any patents, as issued, will prevent the development of competitive products or that our patents will not be successfully challenged by others or invalidated through the administrative process or litigation.

In the US, our registered trademarks include e+®, ePlus®, Docpak®, Viewmark®, OneSource®, Where Technology Means More® and GRIT: Girls Re-Imagining Tomorrow ®. We also have registered IGXGlobal®, and IGXGlobal an ePlus Technology, inc. Company® and certain variations thereon in the UK and the EU. We intend to use and protect these and our other marks, including common-law marks, as we deem necessary. We have over 20 registered copyrights, in addition to unregistered copyrights in our website content, software, marketing and other written materials. We believe our trademarks and copyrights have significant value and are an important factor in the marketing of our products.

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Our means of protecting our proprietary rights may not be adequate, and our competitors may independently develop similar technology, duplicate our products or design around our proprietary intellectual property.

FINANCIAL AND RISK MANAGEMENT ACTIVITIES

Inventory Management: We have drop-shipment arrangements with many of our vendors and distributors, which permit us to offer products to our customers without taking physical delivery of the equipment. Ingram Micro, Arrow Electronics, and TD SYNNEX are our largest distributors. Using the distribution systems available, we frequently sell products that are shipped from the vendors or distributors directly to our customers’ location, which assists us in reducing inventory and minimizing shipping costs. For the year ended March 31, 2022, our three largest distributors accounted for over 35% of our purchases related to our technology segment net sales.

Risk Management and Process Controls: We use and maintain conservative underwriting policies and disciplined credit approval processes in both our technology and financing segments. We have an executive management review process and other internal controls in place to evaluate transactions’ potential risk.

In our technology segment, we manage our risk by using conservative credit quality analysis and periodic monitoring of customer financial results or third-party risk evaluation tools; monitoring customer accounts receivable balances and payment history; proactively pursuing delinquent accounts; ensuring we have appropriate contractual terms and conditions; perfecting security interests when practicable; requiring prepayment or deposits if indicated; performing fraud checks for new accounts; and evaluating general economic as well as industry specific trends. Our systems automatically decrease trade credit lines based on assigned risk ratings.

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In our financing segment, we manage our risk in assets we finance by assigning the contractual payments due under the financing arrangement to third-parties and the continued monitoring of our customers’ credit profile. We also use agency purchase orders to procure equipment for lease to our customers and otherwise take measures to minimize our inventory of financed assets. When our technology segment is the supplier of the assets being financed, we retain certain procurement risks. Our financing arrangements with our customers are generally fixed rate.

As a result of COVID-19, we have tightened our credit lines with many of our customers, particularly in the customer end markets under significant duress such as retail. Some customers have requested extended terms which we are assessing on a case by case basis. In our financing segment, we reduced our exposure by transferring certain transactions on a non-recourse basis.

Credit Risk Loss Experience: During the fiscal year ended March 31, 2022, we decreased our allowance for credit losses by $102 thousand and incurred actual credit losses of $545 thousand. During the fiscal year ended March 31, 2021, we increased our allowance for credit losses by $1,436 thousand and incurred actual credit losses of $178 thousand.

BACKLOG

We rely on our vendors or distributors to fulfill a large majority of our shipments to our customers. As of March 31, 2022, we recorded customer commitments to purchase products or services that remain open until either executed or canceled (“open orders”) of $973.0 million and deferred revenue of $116.9 million. As of March 31, 2021, we had open orders of $476.8 million and deferred revenues of $99.1 million. We expect that most of the open orders and approximately 74% of deferred revenue as of March 31, 2022, will be recognized within the next 12 months. Our backlog has increased year over year due to supply chain issues, including a shortage of IT products, that is causing delays in fulfilling some orders.

HUMAN CAPITAL

Our employees are an important resource for us, and their collective dedication and talent enable us to be a trusted advisor to our customers.

As of March 31, 2022, we employed a total of 1,577 employees, including 1,524 in the US, 29 in India, 21 in the UK, and 3 in Singapore. We believe we have a good relationship with our employees. More than one-third of our employees have a tenure of six or more years, and over 20% have a tenure of more than 10 years. None of our employees are represented by a labor union.

OUR CULTURE

In the early days of the COVID-19 pandemic, our Chief Executive Officer introduced the motto of “Be Safe, Be Smart, and Be Kind.” to convey the timeless qualities that embody the culture we have spent 30 years building and which have been even more important during these past two years. We are committed to providing a workplace free of unlawful harassment or discrimination based on race, color, religion/religious creed, sex (including pregnancy, childbirth, or related medical conditions), gender, gender expression, gender identity, transgender, sexual orientation, national origin (including ancestry), age, marital status (including same-sex marriages), genetic information/predisposition/carrier status, physical or mental disability or medical condition, military/veteran status, or any other legally protected characteristic. Through our policies, our training, and the everyday actions of our leadership, we expect our employees to treat each other, our customers, and all our business partners with respect and equality for all persons consistent with the “Be Safe, Be Smart, and Be Kind” motto.

Corporate social responsibility is also an important part of our culture and we focus efforts around supporting the communities in which we live and work. A sample of our efforts include participating in One Tree Planted, Habitat for Humanity, and Be the Match. Since 2017, we have sponsored GRIT: Girls Re-Imagining Tomorrow® in partnership with Cisco Systems, Inc. GRIT introduces diverse groups of middle school girls to technology-focused career possibilities, with an emphasis on cyber security and artificial intelligence. In 2022, GRIT kicked off a new program year at six schools across the country, with more than 90 students participating.

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FUNCTIONAL AREAS OF OUR EMPLOYEE BASE

The functional areas of our employees are as follows:

	As of March 31,				Change
	2022		2021
Sales and marketing		588		589		(1	)
Professional services		666		662		4
Administration		229		217		12
Internal IT		88		85		3
Management		6		7		(1	)
		1,577		1,560		17

COVID-19 SAFETY

During the past two years, in response to the COVID-19 pandemic, we implemented a flexible work from home strategy for all our offices, designed to help keep our employees, their families, and our communities safer. We provided training and support to our employees during this time, especially for those who performed essential services onsite with customers and in our integration centers, supporting our customers, many of which are in critical infrastructure sectors themselves.

ATTRACTING TALENT

While we operate in a competitive labor environment, we believe that that our culture, policies and labor practices, and our competitive performance-based compensation contribute to strong relations with our employees. We offer a range of affordable and flexible benefits options to assist with health and well-being. Each new employee receives a welcome box equipped with ePlus branded gifts to jump start their ePlus spirit. We have continued the flexible work from home strategy we adopted during the COVID-19 pandemic, and we anticipate evolving to varied hybrid models for the future of work.

TRAINING AND DEVELOPMENT

As our employees are an important resource to us, we invest in their ongoing professional development. Our education program provides financial support for employees who want to participate in undergraduate and graduate studies, continuing education, skill building including technical certifications, and other professional enrichment related to their position with ePlus. New employees are assigned approximately 30 short training videos during their first eight months of employment, covering soft skills, compliance, and our specific business. All employees have access to ePlus University, which offers thousands of on-demand courses, from business and technical skills to leadership to compliance. We also provide live and recorded presentations from numerous in-house leaders and experts in a variety of topics, as well as in-person workshops on management skills and leadership. All employees are supported in, and expected to, remain current in the knowledge areas relevant to their position.

We value our employees’ growing their career and technical knowledge. Across our company, our employees collectively hold nearly 5,000 certifications or accreditations. In particular, our highly skilled, experienced personnel include account executives, pre-sales and inside-sales staff trained on our broad solutions capabilities and category-focused subject-matter experts. Our approximately 375 technical employees hold nearly 3,000 certifications, with over 1,100 different titles, among over 100 vendors, with a heavy concentration in our top vendor partners.

We recognize our employee successes in many ways. We award top performers in our sales and services departments with awards and gifts, including a “President’s Club” trip, which we expect to resume in summer 2022 after a two-year COVID-19-induced hiatus. We also promote employee engagement and recognition through our ePlus Recognition platform where employees can announce and/or thank other employees for their efforts and receive awards. In addition, we recognize support staff with our annual Executive Choice Awards, and our CEO Degrees of Excellence award, which recognizes employees who perform an exceptional act of community service. During the most recent fiscal year, each employee (except for our executive officers) received two special cash bonuses. In addition, we have developed career paths for most functional areas to illustrate the many career paths within ePlus.

US SECURITIES AND EXCHANGE COMMISSION REPORTS

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, filed with or furnished to the US SEC, are available free of charge through our Internet website, www.eplus.com, as soon as reasonably practical after we have electronically filed such material with, or furnished it to, the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents on or accessible through these websites are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

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EXECUTIVE OFFICERS

The following table sets forth the name, age and position of each person who was an executive officer of ePlus on March 31, 2022. There are no family relationships between any directors or executive officers of ePlus.

Name	Age	Position
Mark P. Marron	60	Chief Executive Officer, President, and Director
Elaine D. Marion	54	Chief Financial Officer
Darren Raiguel	51	Chief Operating Officer and ePlus Technology, inc. President

The business experience of each executive officer of ePlus is described below:

MARK MARRON – CHIEF EXECUTIVE OFFICER, PRESIDENT AND DIRECTOR

Mark P. Marron became the Chief Executive Officer and President of ePlus inc. on August 1, 2016. He began his career at ePlus in 2005 as Senior Vice President of Sales and became Chief Operating Officer in 2010. A 30-year plus industry veteran, he was formerly with NetIQ where he held the position of Senior Vice President of Worldwide Sales and Services. Prior to joining NetIQ, Mr. Marron served as General Manager of Worldwide Channel Sales for Computer Associates International Inc., a provider of software and services that enables organizations to manage their IT environments. Mr. Marron has extensive experience throughout North America, Europe, the Middle East, and Africa and holds a Bachelor of Science degree in Computer Science from Montclair State University.

ELAINE MARION – CHIEF FINANCIAL OFFICER

Elaine D. Marion joined us in 1998. Ms. Marion became our Chief Financial Officer on September 1, 2008. From 2004 to 2008, Ms. Marion served as our Vice President of Accounting. Prior to that, she was the Controller of ePlus Technology, inc., a subsidiary of ePlus, from 1998 to 2004. Ms. Marion currently serves on the Advisory Board of the School of Business at the University of Mary Washington and as chair of the George Mason University School of Business Dean’s Advisory Council. Ms. Marion is a graduate of George Mason University, where she earned a Bachelor of Science degree in Business Administration with a concentration in Accounting.

DARREN RAIGUEL– CHIEF OPERATING OFFICER AND EPLUS TECHNOLOGY INC. PRESIDENT

Darren S, Raiguel joined the company in 1997 as an account executive and has held numerous management positions in the organization for well over a decade. Mr. Raiguel became our Executive Vice President of Technology Sales, and in May 2018 was promoted to Chief Operating Officer of ePlus inc. and President of ePlus Technology, inc. Mr. Raiguel received a Bachelor of Business Administration degree from Temple University, with dual majors in Marketing and Finance. He has participated in numerous industry organizations, councils, and advisory boards throughout his career.

ITEM 1A. RISK FACTORS

There are many factors that could adversely affect our business, results of operations and cash flows, some of which are beyond our control. The following is a description of some important factors that may cause our business prospects, results of operations and cash flows in future periods to differ materially from those currently expected or desired. Factors not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, results of operations and cash flows.

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RISKS SPECIFIC TO OUR BUSINESS

If we lost one or more of our large volume customers, our earnings may be affected.

The contracts for the provision of products and services from us to our customers are generally non-exclusive agreements without volume purchase commitments and are terminable by either party upon 30 days’ notice. The loss of one or more of our larger customers, the failure of such customers to pay amounts due to us, or a material reduction in the amount of purchases made by such customers could have a material adverse effect on our business, financial position, results of operations and cash flows. As of March 31, 2022, and 2021, our accounts receivable-trade balance included approximately 14% and 20%, respectively, concentration of invoices due from Verizon Communications Inc.

Supply chain issues, including a shortage of IT products, may increase our costs or cause a delay in fulfilling customer orders, completing professional services, or purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results.

We depend upon the supply of products available from our vendors to fulfill orders from our customers on a timely basis. At present, there is a worldwide shortage of certain IT products resulting from 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 and the predictability of lead times for delivery of products, the costs of products, and our ability to meet customer demands. As a result of longer lead times, some sales to customers have been deferred and we are carrying more inventory. Delays in product shipments may cause a delay in related services as well. We believe extended lead times will likely persist through at least the end of the calendar year. As a result, we may be at risk for customers cancelling orders and we may not be able to cancel our order with the supplier. If we are unable to mitigate these disruptions, our financial results may be adversely impacted. In addition, we have experienced some increases in prices from our suppliers and increases in wages. If we are unable to pass along these increases to customers, our financial results may be adversely impacted. We provide certain professional and managed services under fixed price contracts. If we fail to accurately estimate our costs, including due to inflation, the profitability of our contracts may be adversely affected.

Supply chain issues, including a shortage of IT products and available services, may increase our costs or cause a delay in purchasing IT products needed to support our internal infrastructure or operations, resulting in an impact on our technology operations and availability of our IT systems, which could result in a materially adverse effect on our operations and financial results.

We may not be able to hire and/or retain personnel that we need.

To increase market awareness and sales of our offerings, we may need to expand our marketing efforts and sales operations in the future. Our products and services require a sophisticated sales effort and significant technical engineering talent. For example, our sales and engineering candidates must have highly technical hardware and software knowledge to create a customized solution for our customers’ business processes. Competition for qualified sales, marketing and engineering personnel fluctuates depending on market conditions. We are currently experiencing an increasingly competitive labor market not only for our sales, marketing, and engineering roles, but for all our roles including support and administrative positions. We are uncertain if the competitive labor environment will continue or if COVID-19 and/or the ongoing “great resignation” occurring in the US economy will impact it in the future. Additionally, the loss of senior leaders or the failure to successfully implement a succession plan could adversely affect our ability to manage operations and execute strategies.

In addition, changes to immigration laws, prior to, because of, and subsequent to COVID-19 may impact our ability to hire or retain talent. Changes in laws relating to non-compete and non-solicitation agreements make it difficult to manage hiring and retention. In some cases, our competitors have required their employees to agree to such agreements as part of their employment, and in some cases, we may not be able to enforce similar restrictions; both scenarios present challenges and costs. Additionally, in some cases our relationship with a customer may be impacted by turnover in our sales or engineering team.

Actual or anticipated epidemics, pandemics, outbreaks, or other public health crises may adversely affect our customers’ and suppliers’ financial condition and the operations of our business.

Our business could be materially and adversely affected by the impact of the disease caused by the novel coronavirus, COVID-19, which was declared a pandemic by the World Health Organization, or the actual or public perception of the risks related to any epidemic, pandemic, outbreak, or other public health crisis. The risk of COVID-19 pandemic, or public perception of the risks associated with the COVID-19 pandemic, could cause customers to delay or cancel orders, and could cause temporary or long-term disruptions in our supply chains and/or delays in the delivery of our products and services to our customers. Quarantines or other cancellations of public events as well as governmental containment actions could also adversely affect our customers’ financial condition, resulting in reduced spending for the products and services we sell or uncollectible accounts receivable, leases or notes receivable or our customers’ ability to receive goods we ship to their locations. Moreover, the COVID-19 pandemic has resulted in a high percentage of our employees working from home, which could adversely affect our ability to adequately staff and manage our businesses. Risks or regulations related to an epidemic, pandemic, or other health crisis, such as COVID-19, have and may continue to lead to the complete or partial closure of one or more of our offices or configuration centers or the operations of our customers or our sourcing partners. Office closures of our customers may reduce our ability to provide onsite professional services and staffing. The ultimate extent to which the current COVID-19 pandemic, future mutations of the virus, and the efficacy of the vaccine and/or boosters will affect the financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity and duration of the current pandemic.

We began monitoring the COVID-19 outbreak and following the guidance of public health authorities in January 2020. We continue to adapt our protective measures in response to the COVID-19 outbreak that is taking place world-wide. These measures include permitting employees work from home to the extent their job function enables them to do so, asking some employees to self-quarantine at home, and adjusting our facilities’ janitorial and sanitary policies. We have and may from time to time continue to include various health-related measures, such as requiring employees and visitors to undergo a health screening or wear a mask. In addition, our employees may have health issues related to COVID-19 and may have unpredictable work schedules due to childcare responsibilities as many schools and childcare centers may modify their on-premise availability. We are regularly revisiting the measures we are taking in response to the evolving COVID-19 pandemic, and we are likely to take additional action in response to the various requirements and recommendations of governmental, other health authorities, or our customers, who may require mandatory vaccinations. Existing measures and any future actions, such as renewed Stay at Home orders, may result in a disruption to our business.

As our employees return to the workplace, we may face challenges implementing newly required processes, technologies, and procedures specific to COVID-19, including paid time off laws and health screenings. Additionally, as facts, guidance and perception are rapidly changing, we may face challenges responding to actual or possible COVID-19 exposure in the workplace, training managers to address an anticipated uptick in leave and accommodation issues and issuing corporate communications to effectively assuage and respond to employee concerns regarding COVID-19.

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Breaches of data security and the failure to protect our information technology systems and confidential information from cybersecurity threats, our ability to maintain compliance with data privacy laws and regulations, or misuse of our customers’ or employees’ information could adversely impact our business.

Our business involves the storage and/or transmission of proprietary information and sensitive or confidential data, including personal information of our employees, customers, and others. In addition, we rely on our vendors that provide goods and services to us to have adequate security measures in place to protect our operations. Also, we operate data centers for our customers that host their technology infrastructure and may store and transmit both business-critical data and confidential information. In connection with our services business, some of our employees also may have access to our customers’ confidential data and other information. We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologies evolve, and the portfolio of the service providers with whom we share confidential information grows, we could be exposed to increased risk of breaches in security and other illegal or fraudulent acts, including ransomware attacks and other types of cyberattacks. The evolving nature of such threats, considering new and sophisticated methods used by criminals and cyberterrorists, including computer viruses, malware, phishing, misrepresentation, social engineering, and forgery, are making it increasingly challenging to anticipate and adequately mitigate these risks.

As a high percentage of our employees are currently working from home as a result of the COVID-19 pandemic, we are highly reliant on the availability and functionality of our information systems to enable our operations. Working from home may increase risk of data loss, including privacy-related events. If our information systems are not operational for reasons which may include cyber security attacks, data center failures, failures by telecom providers to provide services to our business and to our employees’ homes, power failures, or failures of off-premise software such as SaaS based software, our business and financial results may be adversely impacted.

If third-parties or our employees are able to maliciously penetrate our network security or otherwise misappropriate our customers’ information or employees’ personal information, or other information for which our customers may be responsible and for which we agree to be responsible in connection with service contracts into which we may enter, or if we give third-parties or our employees improper access to certain information, we could be subject to liability. This liability could include claims for unauthorized access to devices on our network; unauthorized access to our customers’ networks, hardware, applications, data, devices, or software; unauthorized purchases with credit card information; and identity theft or other similar fraud-related claims. This liability could also include claims for other misuses of or inappropriate access to personal information. Other liability could include claims alleging misrepresentation of our privacy and data security practices. Any such liability for misappropriation of this information could decrease our profitability. In addition, federal and state agencies have been investigating various companies regarding whether they misused or inadequately secured information. We could incur additional expenses when new laws or regulations regarding the use, safeguarding, or privacy of information are enacted, or if governmental agencies require us to substantially modify our privacy or security practices. We could fail to comply with international and domestic data privacy laws, the violation of which may result in audits, fines, penalties, litigation, or administrative enforcement actions with associated costs.

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Third parties, such as hackers, could circumvent or sabotage the security practices and products used in our product and service offerings, and/or the security practices or products used in our internal IT systems, which could result in disclosure of sensitive or personal information, unauthorized procurement, or other business interruptions that could damage our reputation and disrupt our business. Attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advanced persistent threats.

Advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments may result in a compromise or breach of the security practices we use to protect sensitive customer transaction information and employee information. A party that can circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. Further, third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords, or other information or otherwise compromise the security of our internal networks and/or our customers’ information. Since techniques used to obtain unauthorized access change frequently and the impact and severity of security breaches are increasing, we may be unable to implement adequate preventative measures or timely identify or stop security breaches while they are occurring.

We may be required to expend significant capital and other resources to protect against security breaches or to remediate the subsequent risks and issues caused by such breaches. Our security measures are designed to protect against security breaches, but our failure to prevent such security breaches could cause us to incur significant expense to investigate and respond to a security breach and remediate any problems caused by any breach, subject us to liability, damage our reputation, and diminish the value of our brand. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. We also cannot be sure that our existing insurance coverage for errors and omissions or security breaches will continue to be available on acceptable terms or in sufficient amounts to cover one or more large claims, or that our insurers will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or changes in our insurance policies, including additional exclusions, premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business, financial condition, and results of operations.

We rely on a small number of key vendors in our supply chain, and do not have long-term supply or guaranteed price agreements or assurance of stock availability with our vendors.

A substantial portion of our revenue within our technology segment depends on a small number of key vendors. Products manufactured by Cisco Systems represented approximately 39%, 36%, and 40% of our technology segment net sales for the years ended March 31, 2022, 2021, and 2020, respectively. Products manufactured by NetApp, Hewlett Packard Enterprise, HP Inc., Juniper Networks, Dell/EMC, and Arista Networks, collectively represented approximately 23% - 25% of technology segment net sales for the last three years. Manufacturing interruptions or delays, including as a result of the financial instability or bankruptcy of manufacturers, changes to or the addition of trade laws, duties or tariffs, currency fluctuations, significant labor disputes such as strikes, natural disasters, political or social unrest, international conflicts, such as Russia’s invasion of Ukraine, pandemics, (such as the COVID-19 pandemic) or other public health crises, or other adverse events affecting any of our vendors’ facilities, could disrupt our supply chain. We are experiencing product constraints due to the unavailability of raw materials or components, delays in shipping, failure of vendors to accurately forecast customer demand or to manufacture or otherwise obtain sufficient quantities of product or component parts to meet customer demand, among other reasons. If we experience significant supply chain disruptions, we may not be able to develop alternate sourcing quickly on favorable terms, if at all, which could result in increased costs, loss of sales and a loss of customers, and adversely impact our financial condition and results of operations. In addition, we are experiencing price increases from our suppliers as a result of an inflationary environment. Our intention is to pass along the price increases to our customers but that may not be possible for all cost increases. Some manufacturers and suppliers have instituted policies to disallow order cancellations. We may be at risk if a customer cancels an order with us, and we cannot cancel our order with the supplier.

As we do not stock inventory that is not related to an order we have received from our customers, we depend upon the supply of products available from our vendors to fulfill orders from our customers on a timely basis.

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The loss of a key vendor or changes in its policies could adversely impact our financial results. Violations of a contract that results in either the termination of our ability to sell the product or a decrease in our certification level with the vendor could adversely impact our financial results. In addition, a reduction in the trade credit lines or the favorable terms granted to us by our vendors and financial partners could increase our need for and cost of working capital and have a material adverse effect on our business, results of operations and financial condition.

We depend on third-party companies to perform certain of our obligations to our customers, which if not performed adequately could cause significant disruption to our business.

We rely on arrangements with third parties to perform certain professional services, staffing services, managed services, maintenance, warranties, configuration services, and other services for our customers. If these third-parties do not perform these services in accordance with the terms of our agreement and of a professional standard customary for the services, or if they cause disruption of or security weaknesses in our customers’ businesses, results to our organization could include legal claims and associated costs, monetary damages paid to our customers, and an adverse effect on our customer relationships, our brand, and our reputation, and our results of operations or cash flows could be affected. In addition, the acquisition of third-party companies by our competitors may impact our revenue.

We rely on independent shipping companies to deliver products from us and our vendors to our customers. The failure or inability of these shipping companies to deliver products, or the unavailability of their shipping services, even temporarily, could have an adverse effect on our business. We may also be adversely affected by an increase in freight surcharges that may result from economic, supply-chain, geopolitical, or other disruptions.

We depend on having creditworthy customers to avoid an adverse impact on our operating results and financial condition.

Our financing and technology segments require sufficient amounts of debt or equity capital to fund our equipment purchases. If the credit quality of our customer base materially decreases, or if we experience a material increase in our credit losses, we may find it difficult to continue to obtain the required capital for our business, and our operating results and financial condition may be harmed. In addition to the impact on our ability to attract capital, a material increase in our delinquency and default experience would itself have a material adverse effect on our business, operating results, and financial condition.

Many of our customers may be susceptible to economic slowdowns or recessions and may be unable to pay for their purchases or repay the leases or note receivable to us or repayment may be extended by our customers or us. Therefore, our non-performing assets may increase, and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net earnings, and assets in our financing segment. Unfavorable economic conditions including inflation and/or an increase in interest rates also could increase our financing segment’s funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing our financing portfolio and harm our operating results.

The terms of our Credit Facility or lines of credit with our vendors or loss thereof may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.

Our technology segment, primarily through our subsidiary ePlus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with Wells Fargo Commercial Distribution Finance, LLC or “WFCDF”. This facility provides short-term capital for our technology segment. There are two components of the WFCDF credit facility: (1) a floor plan facility and (2) a revolving credit facility. As of March 31, 2022, the facility agreement had an aggregate limit of the two components of $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 technology segment’s credit facility could have a material adverse effect on our future results as we rely on this facility and its components for daily working capital and the operational function of our accounts payable process. Our credit agreement contains various covenants that must be met each quarter and either party may terminate the agreement for any reason with 90-days’ notice. There can be no assurance that we will continue to meet those covenants and failure to do so may limit availability of, or cause us to lose, such financing. There can be no assurance that such financing will continue to be available to us in the future on acceptable terms.

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An economic downturn or recession may negatively impact WFCDF’s willingness to extend credit to us at the current credit limit or an increase in credit limit thus restricting our working capital. We also have lines of credit with our vendors for the purchase of goods and services for resale or internal use. The loss or decrease of our working capital facility or lines of credit with our vendors may have a material adverse effect on our business, results of operations and financial condition.

We may experience a reduction in incentives offered to us and earned by us from our vendors that would affect our earnings.

We receive payments and credits from vendors, including consideration pursuant to volume incentive programs, shared marketing expense programs, and early pay discounts. These programs are usually of finite terms and may not be renewed or may be changed in a way that adversely affects us. Vendor funding is used to offset inventory costs, costs of goods sold, marketing costs and other operating expenses. Certain of these funds are based on our volume of purchases, growth rate of purchases, and marketing programs. If we do not grow our sales over prior periods, or if we do not comply with the terms of these programs, or do not sell certain products that earn the incentive, there could be a material negative effect on the amount of incentives offered or paid to us by vendors. Various factors including COVID-19, supply chain constraints and staffing challenges may affect our ability to meet these volume requirements and may affect our and our vendors’ ability to engage in marketing programs. We may not continue to receive such incentives or may not be able to collect outstanding amounts relating to these incentives in a timely manner, or at all. Any sizeable reduction in, the discontinuance of, a significant delay in receiving, or the inability to collect such incentives, particularly related to incentive programs with our largest vendors, could have a material adverse effect on our business, results of operations and financial condition. If we are unable to react timely to any fundamental changes in the programs of vendors, including the elimination of funding for some of the activities for which we have been compensated in the past, such changes could have a material adverse effect on our business, results of operations and financial condition.

We may fail to innovate or create new solutions which align with changing market and customer demand, and we face substantial competition from other companies.

As a provider of a comprehensive set of solutions, which involves the offering of bundled solutions consisting of direct IT sales, advanced professional and managed services, our propriety software, and financing, we expect to encounter some of the challenges, risks, difficulties, and uncertainties frequently encountered by companies providing bundled solutions in rapidly evolving markets. Some of these challenges include our ability to increase the total number of users of our services, adapt to meet changes in our markets and competitive developments, or continue to update our technology to enhance the features and functionality of our suite of products. Our personnel must continually stay current with vendor and marketplace technology advancements, create solutions which may integrate evolving vendor products and services as well as services and solutions we provide, to meet changing marketplace and customer demand. Further, we may provide customized solutions and services that are solely reliant on our own marketing, design, and fulfillment services, and we may lack the skills or personnel to execute, or COVID-19 may impact our ability to innovate due to travel restrictions, staff availability, or closed lab or data center locations. Our failure to innovate and provide bespoke value to our customers may erode our competitive position, market share and lead to reduced revenue and financial performance.

In all of our markets, some of our competitors have longer operating histories and greater financial, technical, marketing, and other resources than we do. In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer requirements. Many current competitors may have, and potential competitors may have, greater name recognition, engage in more extensive promotional marketing and advertising activities, offer more attractive terms to customers, and adopt more aggressive pricing and credit policies than we do. We may not be successful in achieving revenue growth and may incur additional costs associated with our software products, which may have a material adverse effect on our future operating results as a whole.

In our technology segment, we compete in all areas of our business against local, regional, national, and international firms, including other direct marketers; national and regional resellers; online marketplace competitors; and regional, national, and international service providers. In addition, we face competition from vendors, which may choose to market their products directly to end-users, rather than through channel partners such as our company, and this could adversely affect our future sales. Many competitors compete based principally on price and may have lower costs or accept lower selling prices than we do and, therefore, our gross margins may not be maintainable. Online marketplace competitors are continually improving their pricing and offerings to customers as well as ease of use of their online marketplaces. Our competitors may offer better or different products and services than we offer. In addition, we do not have guaranteed purchasing volume commitments from our customers and, therefore, our sales volume may be volatile.

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In our financing segment, we face competition from many sources including much larger companies with greater financial resources. Our competition may originate from vendors of the products we finance or financial partners who choose to market directly to customers through the vendors’ captive leasing organization or large or regional financial institutions such as banks with substantially lower cost of funds. Our competition may lower lease rates to increase market share.

We may not have adequately designed or maintained our IT systems for internal use or solutions we offer to our customers or have adequate or competent IT personnel to support our business.

We depend heavily upon the accuracy and reliability of our information, telecommunication, cybersecurity, and other systems which are used for customer management, sales, distribution, marketing, purchasing, inventory management, order processing and fulfillment, customer service and general accounting functions. We must continually maintain, secure, and improve our systems. We may not properly select or implement software, such as our implementation of a new lease accounting software expected to be completed later this year, which may result in the lack of data integrity in or between systems, increase our costs or impair our control environment or other negative impacts on our business or results. We may need to implement new software, or make changes to existing software and processes, to be compliant with rapidly evolving data privacy laws, which may incur costs and impact data integrity.  The protections we have in place address a variety of threats to our information technology systems, both internal and external, including human error. Inadequate security practices or design of our IT systems, or IT systems from third parties which we utilize, or third-party service providers’ failure to provide adequate services could result in the disclosure of sensitive or confidential information or personal information or cause other business interruptions that could damage our reputation and disrupt our business. Inadequate design or interruption of our information systems, Internet availability, telecommunications systems or power failures could have a material adverse effect on our business, our reputation, financial condition, cash flows, or results of operations.

Our managed services business requires us to monitor our customers’ devices on their networks across varying levels of service. If we have not designed our IT systems to provide this service accurately or if there is a security breach in our IT system or the customers’ systems, we may be liable for claims. In addition, we rely on our managed services personnel to perform this service. Illness, including from COVID-19, or insufficient staffing, improper training, performance, or supervision may negatively affect the services we provide our customers resulting in decreased revenue and the potential for litigation.

Products as complex as those used to provide our electronic commerce solutions or cloud automation solutions can contain unknown and undetected errors, performance problems, or use open-source code. We may have serious defects following introduction of new products or enhancements to existing products. Undetected errors or performance problems may be discovered in the future and certain errors we consider to be minor may be serious to our customers.

Our software products, or automation solutions, may be circumvented or sabotaged by third parties such as hackers, which could result in the disclosure of sensitive information or personal information, unauthorized procurement, or cause other business interruptions that could damage our reputation and disrupt our business. Attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advanced persistent threats. In addition, our customers may experience a loss in connectivity to our proprietary software solutions because of a power loss at our data center, interruption in internet availability, or defects in our software. This could result in lost revenues, delays in customer acceptance, security breaches, and unforeseen liabilities that would be detrimental to our reputation and to our business.

We rely on the competency of our internal IT personnel. Our failure to hire, develop, retain, and supervise competent IT personnel to secure our data, or design and maintain resilient technology systems including our data and voice networks, infrastructure, and applications, could significantly interrupt our business causing a negative impact on our results.

If we fail to identify acquisition candidates, or perform sufficient due diligence prior to completing an acquisition, or fail to integrate a completed acquisition our earnings may be affected.

Mergers and acquisitions are significant factors in our growth strategy. If we fail to identify businesses available for purchase or at an acceptable valuation, our growth strategy may be negatively affected and, as such, our results of operations.

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Our ability to successfully integrate the operations we acquire, reduce costs, or leverage these operations to generate revenue and earnings growth, could significantly impact future revenue and earnings. Integrating acquired operations is a significant challenge particularly if the pandemic requires most tasks be completed remotely, and integration may divert management’s attention from other business concerns, and there is no assurance that we will be able to manage the integrations successfully. Failure to successfully integrate acquired operations may adversely affect our cost structure thereby reducing our earnings and return on investment. In addition, we may fail to perform adequate due diligence and acquire entities with unknown liabilities, fraud, cultural or business environment issues, or that may not have adequate internal controls as may be required by law.

If we acquire a company that does not fit culturally, strategically, or in some other fashion, the acquisition may not produce the expected results or may negatively affect our reputation, which may negatively affect our business, results of operations, or cash flows. The unpredictability of the economic impact of COVID-19 and inflation will also make it difficult to properly value or anticipate the future success of acquisition targets and impact our overall growth strategy.

A natural disaster or other adverse event at one of our primary configuration centers or a third-party provider location could negatively impact our business.

We have configuration centers in the US and third-party providers in the UK and Netherlands. The configuration centers contain inventory owned by us and our customers, which serve as distribution centers for orders we do not drop ship directly to the customer. We perform services in those configuration centers such as product configuration services, and warehouse and logistics services. If the configuration centers or surrounding infrastructure were to be seriously damaged or disrupted by a natural disaster or other adverse event, including disruption related to political or social unrest, we could utilize another distribution center or third-party distributors to ship products to our customers. However, this may not be sufficient to avoid interruptions in our service or the loss of inventory at that location, and may not enable us to meet all of the needs of our customers and would cause us to incur incremental operating costs. In addition, we operate in facilities which may contain both business-critical data and confidential information of our customers and third parties, such as data center colocation and hosted solution partners. A natural disaster or other adverse event at locations such as these or third-party provider locations could negatively impact our business, results of operations or cash flows.

Our earnings may fluctuate, which could adversely affect the price of our common stock.

Our earnings are susceptible to fluctuations for several reasons, including, but not limited to, variability in the timing of large transactions in our technology and financing segments, product constraints, inflation, and the risk factors discussed herein. In addition, our cost structure is based, in part, on expected sales and gross profit. Therefore, if we experience any unexpected sales or gross profit shortfall, we may not be able to adjust our cost structure rapidly which could have an adverse effect on our business, results of operations or cash flows. In the event our sales or net earnings are less than the level expected by the market in general, such shortfall could have an immediate and significant adverse impact on the market price of our common stock.

We may be required to take impairment charges for goodwill or other intangible assets related to acquisitions.

We have acquired certain portions of our business and assets through acquisitions. Further, as part of our long-term business strategy, we may continue to pursue acquisitions of other companies or assets. In connection with prior acquisitions, we have accounted for the portion of the purchase price paid in excess of the book value of the assets acquired as goodwill or intangible assets, and we may be required to account for similar premiums paid on future acquisitions in the same manner.

Under the applicable accounting principles, goodwill is not amortized and is carried on our books at its original value, subject to annual review and evaluation for impairment, whereas intangible assets are amortized over the life of the asset. Changes in the business itself, the economic environment (including business valuation levels and trends), or the legislative or regulatory environment may trigger a review and evaluation of our goodwill and intangible assets for potential impairment outside of the normal review periods. These changes may adversely affect either the fair value of the business or our individual reporting units and we may be required to take an impairment charge.

If market and economic conditions deteriorate as a result of COVID-19 or otherwise, this could increase the likelihood that we will need to record impairment charges to the extent the carrying value of our goodwill exceeds the fair value of our overall business. Such impairment charges could materially adversely affect our net earnings during the period in which the charge is taken. As of March 31, 2022, we had goodwill and other intangible assets of $126.5 million and $27.3 million, respectively.

We may not be able to realize our entire investment in the equipment we lease.

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The realization of the residual value of the equipment we lease, predominantly at the end of the term of a lease, as well as during the life of the lease, is an important element in our financing segment. At the inception of certain leases, we record a residual value for the leased equipment based on our estimate of the value of the equipment at the expected disposition date.

A decrease in the market value of leased equipment at a rate greater than the rate we projected, whether due to rapid technological or economic obsolescence, excessive or unusual wear and tear on the equipment, or other factors, would adversely affect the recoverability of the estimated residual values of such equipment. Further, certain equipment residual values are dependent on the vendor’s warranties, reputation, rules regarding relicensing of software to operate the equipment, and other factors, including market liquidity. In addition, we may not realize the full market value of equipment if we are required to sell it to meet liquidity needs or for other reasons outside of the ordinary course of business. Consequently, there can be no assurance that we will realize our estimated residual values for equipment.

The degree of residual realization risk varies by transaction type. Sales-type leases bear less risk because contractual payments typically cover 90% or more of the equipment’s lease cost at inception. Operating leases have a higher degree of risk because a smaller percentage of the equipment’s value is covered by contractual cash flows at lease inception.

RISKS RELATED TO THE ECONOMY AND OUR INDUSTRY

General economic weakness may harm our operating results and financial condition.

Our results of operations are largely dependent upon the state of the economy. Global economic weakness, inflation, and uncertainty may result in decreased sales, gross margin, earnings and/or growth rates from our US based customers and from customers outside the US.

An agreement was reached between the UK and the EU in relation to their future relationship in certain areas following the Referendum on the UK’s Membership of the EU (referred to as “Brexit”), which included a new trade and cooperation agreement relating principally to the free trade in goods (the “EU-UK Trade and Cooperation Agreement”). While the EU-UK Trade and Cooperation Agreement provides clarity in respect of the free trade in goods between the UK and the EU, there remain uncertainties related to the stability and effects of the new relationship. Potential adverse consequences of Brexit and the uncertainties around EU-UK Trade and Cooperation Agreement include global market uncertainty, volatility in currency exchange rates, additional costs and operational burdens associated with increased operational restrictions on imports and exports between the UK and other countries and potentially increased regulatory complexities, each of which could have a negative impact on our business, financial condition, or results of operations. We have established two subsidiaries in the Netherlands to help address future developments, as needed, for Brexit, which could add complexity to our international operations as well as result in higher costs associated with serving our customers.

Rising interest rates or the loss of key lenders or the constricting of credit markets may affect our future profitability and our ability to monetize our financing receivables and investments in operating leases.

We finance transactions with our customers utilizing fix-rate borrowing. If we fund such transactions at inception with a third-party lender, we are able to lock an interest rate spread on the transaction between the customer rate and third-party rate. However, we may delay funding the transaction, and if interest rates increase in the interim, the interest rate spread will decrease, which will adversely impact our profitability, or we may not choose to fund the transaction due to higher interest rates, thus inhibiting our ability to monetize our portfolio to generate cash.

We rely on lenders to fund financing transactions we originate with our customers. Loss of any lender or group of lenders may significantly impact our ability to originate financing transactions, which may negatively impact our financial condition. In addition, our lenders may no longer be willing to provide funding under our current terms and conditions and may demand new terms and conditions that negatively impact our ability to consummate a financing transaction with our customers. We are also subject to changes, if any, in our lenders’ willingness to provide financing for different, particularly lower, credit quality lessees, or lessees in certain market segments that may experience headwinds.

The resurgence of COVID-19 may result in a tightened credit market, which may impede our ability to fund on a recourse or non-recourse basis certain of our lesser credit quality customers or other general customers. This may result in less earnings, use of our own cash, or lesser credit quality in our financing portfolio.

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Changes in the IT industry, customers’ usage, or procurement of IT, and/or rapid changes in product standards may result in reduced demand for the IT hardware and software solutions and services we sell.

Our results of operations are influenced by a variety of factors, including the condition of the IT industry, shifts in demand for, or availability of, IT hardware, software, peripherals and services, and industry introductions of new products, upgrades, methods of distribution, and the nature of how IT is consumed and procured. The IT industry is characterized by rapid technological change and the frequent introduction of new products, product enhancements and new distribution methods or channels, each of which can decrease demand for current products or render them obsolete. In addition, the proliferation of cloud technology, IaaS, SaaS, PaaS, software defined networking, or other emerging technologies may reduce the demand for products and services we sell to our customers. Cloud offerings may influence our customers to move workloads to cloud providers, which may reduce the procurement of products and services from us. Changes in the IT industry may also affect the demand for our advanced professional and managed services. These ‘as a service’ offerings in many cases are recorded on a net basis which results in a reduction of net sales and an increase in gross margin, or on a ratable basis. Over the past several years, we have seen a significant increase in adjusted gross billings recorded on a net basis and a ratable basis due to the industry shift to ‘as a service’ offerings. We have invested a significant amount of capital in our strategy to provide certain products and services, and this strategy may adversely impact our financial position due to competition or changes in the industry or improper focus or selection of the products and services we decide to offer. If we fail to react in a timely manner to such changes, our results of operations may be adversely affected. Our sales can be dependent on demand for specific product categories, and any change in demand for or supply of such products could have a material adverse effect on our results of operations.

We depend on continued innovations in hardware, software, and services offerings by our vendors, as well as the competitiveness of their offerings and our ability to partner with new and emerging technology providers.

The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware, software, and services offerings, such as cloud-based solutions, including IaaS, SaaS, and PaaS. We depend on innovations in hardware, software, and services offerings by our vendors, as well as the acceptance of those innovations by our customers for the offerings we sell. A decrease in the rate of innovation by our vendors, or the lack of acceptance of innovations by our customers, or a shift by customers to technology platforms that we do not sell could have an adverse effect on our business, results of operations or cash flows.

In addition, if we are unable to keep up with changes in technology and new hardware, software, and services offerings––for example by not providing the appropriate training to our account managers, sales technology specialists and engineers to enable them to effectively sell and deliver such new offerings to customers––our business, results of operations or cash flows could be adversely affected.

We also depend upon our vendors for the development and marketing of hardware, software, and services to compete effectively with hardware, software, and services of vendors whose products and services we do not currently offer or are not authorized to offer in one or more customer channels. In addition, our success depends on our ability to develop relationships with and sell hardware, software, and services from emerging vendors, as well as vendors that we have not historically represented in the marketplace. To the extent that a vendor’s offering that is highly in demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or we are unable to develop relationships with new technology providers or companies that we have not historically represented, or we partner with a vendor that is not in demand or the demand for whose products significantly decreases, our business, results of operations, or cash flows could be adversely impacted.

RISKS RELATED TO LAWS AND REGULATIONS

Failure to comply with new laws or changes to existing laws may adversely impact our business.

Our operations are subject to numerous US and foreign laws and regulations in a number of areas including, but not limited to, areas of labor and employment, immigration, advertising, e-commerce, patent and copyright, tax, import and export requirements, anti-corruption, data privacy requirements, anti-competition, and environmental, health, and safety. We are also subject to a vast number of pending laws, such as state privacy laws, and securities laws such as the Securities and Exchange Commissions’ proposed rules on climate-related disclosures and proposed amended rules on cybersecurity risk management. Compliance with these laws, regulations, and similar requirements may be onerous and expensive. The laws and regulations may be inconsistent from jurisdiction to jurisdiction and may be repeatedly and unpredictably modified or rescinded by legislative bodies, regulatory agencies, and/or courts, further increasing the cost of compliance and doing business, and the risk of noncompliance. We have implemented policies and procedures designed to help comply with applicable laws and regulations, but there can be no certainty that our employees, contractors, or agents will fully comply with laws and regulations or our policies and procedures. Additionally, as our customers and vendors implement policies and processes for their own compliance with current and pending laws and regulations, they may impose requirements on us, which we may not be able to timely and cost-effectively fulfill.

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In addition, many countries and state and local governments have issued orders to combat COVID-19. These orders may mandate or recommend office closures, telework, or health or safety actions, such as social distancing in the workplace, masks, or health screening. The orders unpredictably change, and each order is different and must be interpreted and applied to the jurisdiction. Additional risk may arise from these orders as they are lifted or changed which may include office closures, closures at customers sites, and additional Stay at Home orders or mandated or recommended safety actions. Additionally, many employment related regulations, such as leave and accommodation matters, have been issued by federal, state, and local governments. These regulations continue to undergo revisions. We may fail to interpret or follow the regulations or orders properly which may result in sanction, penalties, fines, or litigation.

Failure to comply with our public-sector contracts or applicable laws and regulations could result in, among other things, termination, fines or other liabilities, and changes in procurement regulations could adversely impact our business.

Revenues in our public sector are derived from sales to SLED customers, through various contracts and open market sales of products and services. Sales to SLED customers are highly regulated and SLED customer purchases are subject to availability of funds from taxation, grants, or other sources. Noncompliance with contract provisions, government procurement regulations, or other applicable laws or regulations could result in civil, criminal, and administrative liability, including substantial monetary fines or damages, termination of SLED sector customer contracts, and suspension, debarment, or ineligibility from doing business with the government and other customers in the SLED sector. Contracts in the SLED sector are generally terminable at any time for convenience of the contracting agency or upon default and are subject to audits. In addition, most contracts require successfully bidding and award of the contract. These bid processes can be complex and require extensive review of terms and conditions and data compilation. Multiple bidders may win a product category, which creates aggressive competition even after contract award. The effect of any of these possible actions could adversely affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations, or cash flows.

We may not adequately protect ourselves through our contract vehicles, or our insurance policies may not be adequate to address potential losses or claims.

Our contracts may not protect us against the risks inherent in our business including, but not limited to, warranties, limitations of liability, indemnification obligations, human resources and subcontractor-related claims, patent and product liability, regulatory and compliance obligations, data security and privacy, and financing activities. Also, we face pressure from our customers for competitive pricing and contract terms. In addition, order cancellations by our customers may result from product constraints, COVID-19, or the economic consequences thereof. While we may mitigate risk through our contracts, if orders are cancelled by our customers, we may have an increased risk of dispute resulting in non-payment. Such disputes may be complicated by novel legal arguments relating to contract enforceability, such as the application of force majeure, impossibility or impracticability of performance, and frustration of purpose. Despite the non-recourse nature of the loans financing certain of our activities, non-recourse lenders may file suit if the underlying transaction turns out poorly for the lenders. We are subject to such claims and the cost of defending such claims due to the nature of our business.

We also are subject to audits by various vendor partners and customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts.

We face risks of claims from third parties for intellectual property infringement, including counterfeit products, that could harm our business.

We may be subject to claims that our products and services, or products that we resell, infringe on the intellectual property rights of third parties and/or are counterfeit products. In addition, the current product constraint environment may foster more counterfeit product availability and we may be subject to claims by our customers, vendors, or suppliers for unknowingly selling these types of products. The vendor of certain products or services we resell may not provide us with indemnification for infringement or indemnification; however, our customers may seek indemnification from us. We could incur substantial costs in defending infringement claims against ourselves and our customers. In the event of such claims, we and our customers may be required to obtain one or more licenses from third parties. We may not be able to obtain such licenses from third parties at a reasonable cost or at all. Defense of any lawsuit or failure to obtain any such required license could significantly increase our expenses and/or adversely affect our ability to offer one or more of our services.

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We may be unable to protect our intellectual property and costs to protect our intellectual property may affect our earnings.

The success of our business strategy depends, in part, upon proprietary technology and other intellectual property rights. To date, we have relied primarily on a combination of copyright, trademark, and trade secret laws, and contractual provisions with our customers, subcontractors, and employees to protect our proprietary technology. It may be possible for unauthorized third parties to copy certain portions of our products or reverse engineer or obtain and use information that we regard as proprietary. Some of our agreements with our customers and technology licensors contain residual clauses regarding confidentiality and the rights of third parties to obtain the source code for our products. These provisions may limit our ability to protect our intellectual property rights in the future that could seriously harm our business and operating results. Our means of protecting our intellectual property rights may not be adequate.

The legal and associated costs to protect our intellectual property in the US and foreign jurisdictions may significantly increase our expenses and have a material adverse effect on our operating results. We may deem it necessary to protect our intellectual property rights and significant expenses could be incurred with no certainty of the results of these potential actions. Costs relative to lawsuits are usually expensed in the periods incurred and there is no certainty in recouping any of the amounts expended regardless of the outcome of any action.

RISKS RELATED TO OWNERSHIP OF OUR STOCK

If securities analysts do not publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline.

The trading market for our common stock depends in part on the research and reports that third-party securities analysts publish about us and our industry. One or more analysts could downgrade our common stock, or issue other negative commentary about us or our industry. If one or more of the analysts that publish research about us cease coverage, we could lose visibility in the market, or such discontinuance may be viewed negatively by the market. As a result of one or more of these factors, the trading price of our common stock could decline. In the event our future performance does not meet the expectations of such analysts and/or estimates included in their reports, the trading price of our common stock could decline.

Future offerings of debt or equity securities, which would rank senior to our common stock, may adversely affect the market price of our common stock.

If, in the future, we decide to issue debt or equity securities that rank senior to our common stock, it is likely that such securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences, and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings, if any. Thus, holders of our common stock will bear the risk of our future offerings reducing the market price of our common stock and diluting the value of their stock holdings in our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

As of March 31, 2022, we leased approximately 252 thousand square feet of space of office and warehouse space across 33 different properties in the US, UK, and India. Some of our subsidiaries operate in shared office space to support sales, marketing activities and produce cost efficiency. Some sales and technical service personnel work from either home offices or at customer sites. Our largest office location is our headquarters in Herndon, Virginia. The lease contract on this space terminates on December 31, 2022. We believe that our office and warehouse spaces are suitable and adequate for our present needs. We anticipate no difficulty in retaining occupancy through lease renewals, month-to-month occupancy or replacing the leased properties with equivalent properties.

ITEM 3. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please refer to Note 9, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

On March 31, 2022, our common stock traded on the NASDAQ Global Select Market under the symbol “PLUS.”

On May 23, 2022, there were 168 stockholders of record of our common stock, although there is a much larger number of beneficial owners.

DIVIDEND POLICIES AND RESTRICTIONS

We did not pay any cash dividends on our common stock during the fiscal years ended March 31, 2022, and 2021. Holders of our common stock are entitled to dividends if and when declared by our Board of Directors (“Board”), out of funds legally available. Generally, we have retained our earnings for use in the business. We currently intend to retain future earnings to fund ongoing operations and finance the growth and development of our business. Any future determination concerning the payment of dividends will depend upon our financial condition, results of operations, capital requirements and any other factors deemed relevant by our Board.

PURCHASES OF OUR COMMON STOCK

The following table provides information regarding our total purchases of 283,420 shares of ePlus inc. common stock during the fiscal year ended March 31, 2022, including a total of 227,990 shares purchased as part of the publicly announced share repurchase plans or programs. The numbers of shares and price per share for the prior periods presented in the table have been retroactively adjusted to reflect the stock split. See Note 1 “Organization and Summary of Significant Accounting Policies” and Note 11 “Stockholders’ Equity” in the consolidated financial statements included elsewhere in this report for additional information on the stock split.

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		-	$	-		-		881,798	(2	)
May 1, 2021 through May 27, 2021		1,998	$	50.40		-		881,798	(3	)
May 28, 2021 through May 31, 2021		-	$	-		-		1,000,000	(4	)
June 1, 2021 through June 30, 2021		88,690	$	45.21		35,258		964,742	(5	)
July 1, 2021 through July 31, 2021		62,798	$	44.00		62,798		901,944	(6	)
August 1, 2021 through August 31, 2021		-	$	-		-		901,944	(7	)
September 1, 2021 through September 30, 2021		-	$	-		-		901,944	(8	)
October 1, 2021 through October 31, 2021		-	$	-		-		901,944	(9	)
November 1, 2021 through November 30, 2021		-	$	-		-		901,944	(10	)
December 1, 2021 through December 31, 2021		49,943	$	51.90		49,943		852,001	(11	)
January 1, 2022 through January 31, 2022		79,991	$	51.78		79,991		772,010	(12	)
February 1, 2022 through February 28, 2022		-	$	-		-		772,010	(13	)
March 1, 2022 through March 31, 2022		-	$	-		-		772,010	(14	)

(1) All shares acquired were in open-market purchases, except for 55,430 shares, out of which 1,998 were repurchased in May 2021 and 53,432 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 1,000,000 shares. As of April 30, 2021, the remaining authorized shares to be purchased were 881,798.

(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 1,000,000 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 1,000,000.

(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 1,000,000 shares. As of June 30, 2021, the remaining authorized shares to be purchased were 964,742.

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(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 1,000,000 shares. As of July 31, 2021, the remaining authorized shares to be purchased were 901,944.

(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 1,000,000 shares. As of August 31, 2021, the remaining authorized shares to be purchased were 901,944.

(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 1,000,000 shares. As of September 30, 2021, the remaining authorized shares to be purchased were 901,944.

(9) The share purchase authorization in place for the month ended October 31, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of October 31, 2021, the remaining authorized shares to be purchased were 901,944.

(10) The share purchase authorization in place for the month ended November 30, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of November 30, 2021, the remaining authorized shares to be purchased were 901,944.

(11) The share purchase authorization in place for the month ended December 31, 2021, had purchase limitations on the number of shares of up to 1,000,000 shares. As of December 31, 2021, the remaining authorized shares to be purchased were 852,001.

(12) The share purchase authorization in place for the month ended January 31, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of January 31, 2022, the remaining authorized shares to be purchased were 772,010.

(13) The share purchase authorization in place for the month ended February 28, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of February 28, 2022, the remaining authorized shares to be purchased were 772,010.

(14) The share purchase authorization in place for the month ended March 31, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of March 31, 2022, the remaining authorized shares to be purchased were 772,010.

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

ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations (“financial review”) of ePlus is intended to help investors understand our company and our operations. The financial review is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and the related notes included elsewhere in this report.

For a discussion of results for the year ended March 31, 2021 compared to the results for the year ended March 31, 2020, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended March 31, 2021, filed with the Securities and Exchange Commission on May 21, 2021.

On December 13, 2021, we completed a two-for-one stock split in the form of a stock dividend. References made to outstanding shares or per share amounts have been retroactively adjusted for this stock split.

EXECUTIVE OVERVIEW

BUSINESS DESCRIPTION

We provide leading IT products and services, flexible leasing and financing solutions, and enterprise supply management to enable our customers to optimize their IT infrastructure and supply chain processes.

We design, implement, and provide IT solutions for customers. We focus primarily on specialized IT segments including data center infrastructure, networking, security, cloud, and collaboration. Our solutions incorporate hardware and software products from multiple leading IT vendors. As our customers’ IT requirements have grown increasingly complex, we have evolved our offerings by investing in our professional and managed services capabilities and by expanding our relationships with existing and emerging key vendors.

We are an authorized reseller of over 1,000 vendors, which have enabled us to provide our customers with new and evolving IT solutions. We possess top-level engineering certifications with a broad range of leading IT vendors that enable us to offer IT solutions that are optimized for each of our customers’ specific requirements. Our proprietary software solutions allow our customers to procure, control and automate their IT solutions environment.

BUSINESS TRENDS

COVID-19 pandemic update: The novel coronavirus (“COVID-19”) pandemic continues to have widespread 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 rules related to vaccine status, 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. 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 in-person meetings, 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.

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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; the impact of variants; governmental, business, and individuals’ actions in response to the pandemic; the efficacy of vaccines and boosters; the willingness of people to be inoculated; potential vaccine-related regulations; court rulings; 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” of this Annual Report on Form 10-K.

Supply constraints: A worldwide shortage of certain IT products is resulting from, among other things, shortages in semiconductors and other product components. 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.

Inflation: For the periods presented herein, we have experienced increases in prices from our suppliers as well as rising wages and interest rates. We generally have been able to pass price increases to our customers. Our labor costs related to services we perform will take longer to pass to customers that have services engagements where prices may be set. Our financing quotes are generally indexed to market changes to enable us to change rates from time of quote to funding. Financing transactions funded with our cash flows, not debt, are 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 and lock in our profit on the transaction. There can be no assurances, however, that inflation would not have a material impact on our sales, gross profit, or operating costs in the future.

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 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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The following table provides our key business metrics (in thousands, except per share amounts):

	Year Ended March 31,
Consolidated	2022			2021			2020
Net sales	$	1,821,019		$	1,568,323		$	1,588,404
Gross profit	$	460,982		$	393,554		$	391,191
Gross margin		25.3	%		25.1	%		24.6	%
Operating income margin		8.1	%		6.8	%		6.0	%
Net earnings	$	105,600		$	74,397		$	69,082
Net earnings margin		5.8	%		4.7	%		4.3	%
Net earnings per common share - diluted	$	3.93		$	2.77		$	2.57
Non-GAAP: Net earnings (1)	$	117,964		$	85,567		$	82,167
Non-GAAP: Net earnings per common share - diluted (1)	$	4.39		$	3.19		$	3.06
Adjusted EBITDA (2)	$	170,004		$	128,245		$	119,359
Adjusted EBITDA margin		9.3	%		8.2	%		7.5	%
Technology Segment
Net sales	$	1,733,036		$	1,507,954		$	1,530,138
Adjusted gross billings (3)	$	2,620,614		$	2,263,865		$	2,227,885
Gross profit	$	408,153		$	346,235		$	340,588
Gross margin		23.6	%		23.0	%		22.3	%
Operating income	$	109,000		$	75,665		$	62,155
Adjusted EBITDA (2)	$	131,353		$	97,219		$	85,840
Financing Segment
Net sales	$	87,983		$	60,369		$	58,266
Gross profit	$	52,829		$	47,319		$	50,603
Operating income	$	38,316		$	30,670		$	33,124
Adjusted EBITDA (2)	$	38,651		$	31,026		$	33,519

(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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The following table provides our calculation of Non-GAAP Net earnings and Non-GAAP Net earnings per common share – diluted (in thousands, except per share amounts):

	Year Ended March 31,
	2022		2021			2020
GAAP: Earnings before tax	$	146,884	$	106,906		$	95,959
Share based compensation		7,114		7,167			7,954
Acquisition and integration expense		-		271			1,676
Acquisition related amortization expense		10,072		9,116			9,217
Other (income) expense		432		(571	)		(680	)
Non-GAAP: Earnings before provision for income taxes		164,502		122,889			114,126
GAAP: Provision for income taxes		41,284		32,509			26,877
Share based compensation		2,014		2,188			2,218
Acquisition and integration expense		-		78			490
Acquisition related amortization expense		2,803		2,730			2,487
Other (income) expense		120		(143	)		(200	)
Tax benefit (expense) on restricted stock		317		(40	)		87
Non-GAAP: Provision for income taxes		46,538		37,322			31,959
Non-GAAP: Net earnings	$	117,964	$	85,567		$	82,167

	Year Ended March 31,
	2022			2021			2020
GAAP: Net earnings per common share - diluted	$	3.93		$	2.77		$	2.57
Share based compensation		0.20			0.19			0.22
Acquisition and integration expense		-			0.01			0.04
Acquisition related amortization expense		0.26			0.24			0.25
Other (income) expense		0.01			(0.02	)		(0.02	)
Tax benefit (expense) on restricted stock		(0.01	)		-			-
Total non-GAAP adjustments - net of tax		0.46			0.42			0.49
Non-GAAP: Net earnings per common share - diluted	$	4.39		$	3.19		$	3.06

(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.

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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The following table provides our calculations of Adjusted EBITDA (in thousands):

	Year Ended March 31,
Consolidated	2022		2021			2020
Net earnings	$	105,600	$	74,397		$	69,082
Provision for income taxes		41,284		32,509			26,877
Share based compensation		7,114		7,167			7,954
Interest and financing costs		928		521			294
Acquisition and integration expense		-		271			1,676
Depreciation and amortization		14,646		13,951			14,156
Other income (expense)		432		(571	)		(680	)
Adjusted EBITDA	$	170,004	$	128,245		$	119,359
Technology Segment
Operating income	$	109,000	$	75,665		$	62,155
Depreciation and amortization		14,535		13,839			14,016
Share based compensation		6,890		6,923			7,699
Interest and financing costs		928		521			294
Acquisition and integration expense		-		271			1,676
Adjusted EBITDA	$	131,353	$	97,219		$	85,840
Financing Segment
Operating income	$	38,316	$	30,670		$	33,124
Depreciation and amortization		111		112			140
Share based compensation		224		244			255
Adjusted EBITDA	$	38,651	$	31,026		$	33,519

(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.

The following table provides our calculation of Adjusted gross billings (in thousands):

	Year Ended March 31,
	2022		2021		2020
Technology segment net sales	$	1,733,036	$	1,507,954	$	1,530,138
Costs incurred related to sales of third party maintenance, software assurance and subscription/SaaS licenses, and services		887,578		755,911		697,747
Adjusted gross billings	$	2,620,614	$	2,263,865	$	2,227,885

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.

FINANCIAL SUMMARY

During the year ended March 31, 2022, net sales increased 16.1% to $1,821.0 million, or an increase of $252.7 million compared to $1,568.3 million in the prior fiscal year. Product sales for the year ended March 31, 2022, increased 15.7% to $1,580.4 million, or an increase of $214.2 million compared to $1,366.2 million in the prior year. Services sales during the year ended March 31, 2022, increased 19.0% to $240.6 million, or an increase of $38.5 million, over prior year services sales of $202.2 million. The increase in net sales was driven by higher product and service revenues along with higher proceeds from sales of leased equipment. We had increases in net sales to customers in the telecom, media and entertainment, healthcare, and smaller other categories of customers, which were offset by a decrease in net sales to customers in the financial services industry, during the year ended March 31, 2022, compared to the prior year.

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Adjusted gross billings increased by 15.8%, or $356.7 million, to $2,620.6 million for the year ended March 31, 2022, compared to $2,263.9 million in the prior fiscal year. The increase in Adjusted gross billings was due to higher demand from our current customers, as well as from our acquisitions. Adjusted gross billings increased year over year at a faster rate than net sales due to a shift in mix to a higher proportion of third-party maintenance, software assurance, subscriptions/SaaS licenses, and services which we recognize revenue on a net basis.

Consolidated gross profit increased 17.1%, to $461.0 million, compared to $393.6 million in the prior fiscal year due to higher margins. Consolidated gross margin increased 20 basis points to 25.3% for the year ended March 31, 2022, compared to 25.1% for the year ended March 31, 2021. The increase in gross margin was due to expanded gross profit and margins of our technology segment, due to a shift in revenue mix resulting from our continued focus on value added services for our customers, including the increase in sales of our professional and managed services, and sales of third-party maintenance agreements, software assurance, subscriptions/SaaS licenses, and services. The increase in gross margin was partially offset by lower margins in our finance segment due to gains on several large transactions in the prior year.

For the year ended March 31, 2022, operating expenses increased $26.4 million, or 9.2%, to $313.7 million, as compared to $287.2 million in the prior year. The increase in operating expenses for the year ended March 31, 2022, was mainly driven by increased selling, general, and administrative costs with a slight increase in depreciation and amortization expense.

Selling, general, and administrative expense for the year ended March 31, 2022, increased $25.9 million, or 9.5%, to $297.1 million, mainly driven by an increase in salary and fringe benefits, slightly offset by a decrease in our reserve for credit losses. As of March 31, 2022, we had 1,577 employees, an increase of 1.1% from 1,560 as of March 31, 2021. Depreciation and amortization expense increased by $0.7 million and interest and financing costs decreased $0.1 million, due to a decrease in the average balance of non-recourse and recourse notes payable outstanding during the year.

Operating income increased $41.0 million, or 38.5%, to $147.3 million and operating margin increased by 130 basis points to 8.1%, as compared to the year ended March 31, 2021. The increase in operating income was due to a year over increase in gross profit offset by an increase in selling, general, and administrative expense.

Our effective income tax rate for the year ended March 31, 2022, was 28.1%, compared to 30.4% for the prior year. The decrease in our effective income tax rate year over year is primarily due to prior year unfavorable adjustments to the federal benefit from state taxes and non-deductible executive compensation.

Net earnings for the year ended March 31, 2022, increased 41.9% to $105.6 million, as compared to $74.4 million for the year ended March 31, 2021.

Adjusted EBITDA for the year ended March 31, 2022, was $170.0 million, an increase of $41.8 million, or 32.6%, compared to the prior year. Adjusted EBITDA margin was 9.3% for the year ended March 31, 2022, an increase of 110 basis points over the prior year.

For the year ended March 31, 2022, diluted earnings per share were $3.93, an increase of $1.16, or 41.9%, compared to the prior year of $2.77 per diluted share. Non-GAAP diluted earnings per share was $4.39 for fiscal year 2022, an increase of $1.20, or 37.6%, from $3.19 per diluted share in the prior year.

Cash and cash equivalents increased $25.8 million, or 19.9%, to $155.4 million as of March 31, 2022, compared to March 31, 2021. We increased our cash balance through earnings, which was partially offset by an increase in working capital required for the growth in our technology segment, an increase in our cash conversion cycle, and the repurchase of shares of our common stock of $13.6 million. Our cash on hand, funds generated from operations, amounts available under our credit facility and the possible monetization of our investment portfolio have provided sufficient liquidity for our business.

SEGMENT OVERVIEW

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

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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.

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, medical equipment and other 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.

We are implementing a new cloud-based lease accounting application which will provide us with a platform for scalable growth, eliminate inefficient processes, and allow us to retire several legacy applications.

CRITICAL ACCOUNTING ESTIMATES

Our consolidated financial statements have been prepared in accordance with US GAAP. Our significant accounting policies are described in Note 1 of the Notes to the Consolidated Financial Statements under “Organization and Summary of Significant Accounting Policies.” The accounting policies described below are significantly affected by critical accounting estimates. Such accounting policies require significant judgments, assumptions, and estimates, and actual results could differ materially from the amounts reported based on these policies.

REVENUE RECOGNITION — When we enter contracts with customers, we are required to identify the performance obligations in the contract. We recognize most of our revenues from the sales of third-party products, third-party software, third-party maintenance, software support, and services, ePlus professional and managed services, and hosting ePlus proprietary software. Our recognition of revenue differs for each of these different types of performance obligations and identifying each performance obligation appropriately may require judgment.

When a contract contains multiple distinct performance obligations, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin. When we finance sales of third-party software and third-party maintenance, software support, and services, we reduce the transaction price by the financing component.

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We recognize revenue from sales of third-party products and third-party software at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer. We perform an analysis to estimate the amount of sales in-transit at the end of the period and adjust revenue and the related costs to reflect only what has been delivered to the customer. This analysis is based upon an analysis of current quarter and historical delivery dates.

We recognize revenue from sales of third-party maintenance, software support, and services when our customer and vendor accept the terms and conditions of the arrangement. On occasion, judgment is required to determine this point in time.

We provide ePlus professional services under both time and materials and fixed price contracts. When services are provided on a time and materials basis, we recognize sales at agreed-upon billing rates as services are performed. When services are provided on a fixed fee basis, we recognize sales over time in proportion to our progress toward complete satisfaction of the performance obligation. Using this method requires a determination of the appropriate input or output method to measure progress. We most often measure progress based on costs incurred in proportion to total estimated costs, commonly referred to as the “cost-to-cost” method. When using this method, significant judgment may be required to estimate the total costs to complete the performance obligation. We typically recognize sales of ePlus managed services on a straight-line basis over the period services are provided.

We recognize financing revenues from our investments in leases and notes receivable. We recognize interest income on our notes-receivable using the effective interest method.

We classify our leases as either sales-type leases or operating leases. For sales-type leases, upon lease commencement, we recognize the present value of the lease payments and the residual asset discounted using the rate implicit in the lease. When we are financing equipment provided by another dealer, we typically do not have any selling profit or loss arising from the lease. When we are the dealer of the equipment being leased, we typically recognize revenue in the amount of the lease receivable and cost of sales in the amount of the carrying value of the underlying asset minus the unguaranteed residual asset. We may need to use judgment to determine the fair value of the equipment. After the commencement date, we recognize interest income as part of net sales using the effective interest method. For operating leases, we recognize the underlying asset as an operating lease asset. We depreciate the asset on a straight-line basis to its estimated residual value over its estimated useful life. We recognize the lease payments over the lease term on a straight-line basis as part of net sales.

We account for the transfer of financial assets as sales or secured borrowings. When a transfer meets all the requirements for sale accounting, we derecognize the financial asset and record a net gain or loss that is included in net sales. We utilize qualified attorneys to provide a true-sale-at-law opinion to support the conclusion that transferred financial assets have been legally isolated.

RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term. Our estimates vary, both in amount and as a percentage of the original equipment cost, and depend upon several factors, including the equipment type, vendor’s discount, market conditions, lease term, equipment supply and demand, and new product announcements by vendors. We evaluate residual values for impairment on a quarterly basis. We do not recognize upward adjustments due to changes in estimates of residual values.

GOODWILL — We test goodwill for impairment on an annual basis, as of October 1, 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 amount. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit.

In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. A significant amount of judgment is involved in determining if an event representing an indicator of impairment has occurred between annual test dates. Such indicators may include: a significant decline in expected future cash flows; a sustained, significant decline in stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and reductions in revenue or profitability growth rates.

In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. We estimate the fair value of each reporting unit using a combination of the income approach and market approaches.

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The income approach incorporates the use of a discounted cash flow method in which the estimated future cash flows and terminal values for each reporting unit are discounted to a present value using a discount rate. Cash flow projections are based on management’s estimates of economic and market conditions which drive key assumptions of revenue growth rates, operating margins, capital expenditures and working capital requirements. The discount rate in turn is based on the specific risk characteristics of each reporting unit, the weighted average cost of capital and its underlying forecast.

The market approach estimates fair value by applying performance metric multiples to the reporting unit’s prior and expected operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit.

The fair values determined by the market approach and income approach, as described above, are weighted to determine the fair value for each reporting unit. Although we have consistently used the same methods in developing the assumptions and estimates underlying the fair value calculations, such estimates are uncertain and may vary from actual results.

VENDOR CONSIDERATION — We receive payments and credits from vendors and distributors, including consideration pursuant to volume incentive programs, and shared marketing expense programs. Many of these programs extend over one or more quarters’ sales activities. Different programs have different vendor/program specific goals to achieve. We recognize the rebates pursuant to volume incentive programs, when the rebate is probable and reasonably estimable, based on a systematic and rational allocation of the cash consideration offered to each of the underlying transactions that results in our progress towards earning the rebate. Should our actual performance be different from our estimates, we may be required to adjust our receivables.

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We measure expected credit losses on a collective (pool) basis when similar risk characteristics exist. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We estimate a loss rate for each pool using the historical loss rate as a basis and adjust for differences in asset specific risk and current conditions. Since the onset of the COVID-19 pandemic, we have measured our allowance using higher than historical loss rates to reflect forecasted credit deterioration. Should our actual credit losses be different from our estimates, this will result in adjustments to credit losses that could adversely affect our operating results.

INCOME TAXES — We make certain estimates and judgments in determining income tax expense for financial statement reporting purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which principally arise from differences in the timing of recognition of revenue and expense for tax and financial statement reporting purposes. We also must analyze income tax reserves, as well as determine the likelihood of recoverability of deferred tax assets and adjust any valuation allowances accordingly.

Considerations with respect to the recoverability of deferred tax assets include the period of expiration of the tax asset, planned use of the tax asset, and historical and projected taxable income as well as tax liabilities for the tax jurisdiction to which the tax asset relates. Valuation allowances are evaluated periodically and will be subject to change in each future reporting period as a result of changes in one or more of these factors. The calculation of our tax liabilities also involves considering uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain income tax positions based on our estimate of whether, and the extent to which, additional taxes will be required.

BUSINESS COMBINATIONS — We account for business combinations using the acquisition method. For each acquisition, we recognize most assets acquired, and liabilities assumed at their fair values at the acquisition date. Our valuations of certain assets acquired, including customer relationships and trade names, and certain liabilities assumed, such as performance obligations, involve significant judgment and estimation. Additionally, our determination of the purchase price may include an estimate for the fair value of contingent consideration. We utilize independent valuation specialists to assist us in determining the fair value of certain assets and liabilities. Our valuations utilize significant estimates, such as forecasted revenues and profits. Changes in our estimates could significantly impact the value of certain assets and liabilities.

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RESULTS OF OPERATIONS

The Year Ended March 31, 2022, Compared to the Year Ended March 31, 2021

TECHNOLOGY SEGMENT

The results of operations for our technology segment for the years ended March 31, 2022, and 2021 were as follows (in thousands):

	Year Ended March 31,				Change
	2022		2021
Net sales
Product	$	1,492,411	$	1,305,789	$	186,622	14.3	%
Services		240,625		202,165		38,460	19.0	%
Total		1,733,036		1,507,954		225,082	14.9	%
Cost of sales
Product		1,175,789		1,036,627		139,162	13.4	%
Services		149,094		125,092		24,002	19.2	%
Total		1,324,883		1,161,719		163,164	14.0	%
Gross profit		408,153		346,235		61,918	17.9	%
Selling, general, and administrative		283,690		256,210		27,480	10.7	%
Depreciation and amortization		14,535		13,839		696	5.0	%
Interest and financing costs		928		521		407	78.1	%
Operating expenses		299,153		270,570		28,583	10.6	%
Operating income	$	109,000	$	75,665	$	33,335	44.1	%
Adjusted gross billings	$	2,620,614	$	2,263,865	$	356,749	15.8	%
Adjusted EBITDA	$	131,353	$	97,219	$	34,134	35.1	%

Net sales: Net sales for the year ended March 31, 2022, increased by $225.1 million, or 14.9%, to $1,733.0 million due to an increase in net sales to our customers in telecom, media and entertainment, healthcare, and smaller other categories of customers, which were offset by a decrease in net sales to customers in the financial services sector. Product sales increased 14.3%, or $186.6 million, to $1,492.4 million and services revenues increased 19.0%, or $38.5 million, to $240.6 million due to an increase in professional services for the year ended March 31, 2022, as compared to the prior year.

Adjusted gross billings increased to $2,620.6 million, or 15.8%, from $2,263.9 million in the prior year. The increase in Adjusted gross billings was due to an increase in organic demand from our customers in the telecom, media and entertainment, healthcare, and smaller other categories of customers, and our acquisition of Systems Management and Planning, Inc. (“SMP”) in December 2020.

We analyze sales by customer end market and by manufacturer. The percentage of net sales by customer end market and by vendor are summarized below:

	Year Ended March 31,						Change
Net sales by customer end market:	2022			2021
Telecom, Media & Entertainment		29	%		25	%		4	%
Healthcare		16	%		13	%		3	%
Technology		14	%		17	%		(3	%)
SLED		14	%		16	%		(2	%)
Financial Services		9	%		13	%		(4	%)
All others		18	%		16	%		2	%
Total		100	%		100	%

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	Year Ended March 31,						Change
Net sales by vendor:	2022			2021
Cisco Systems		39	%		36	%		3	%
Dell EMC		9	%		7	%		2	%
Juniper Networks		5	%		6	%		(1	%)
NetApp		5	%		4	%		1	%
HP Inc. & HPE		3	%		4	%		(1	%)
Arista Networks		3	%		3	%		0	%
All others		36	%		40	%		(4	%)
Total		100	%		100	%

Our revenues by customer end market have remained consistent over the prior year, with over 80% of our sales being generated from customers within the five end markets specified above. For the fiscal year ended March 31, 2022, we had an increase in the percentage total revenues from customers in telecom, media and entertainment, and healthcare industries, while we had decreases in the percentage of total revenues in the financial service, technology, and SLED industries. 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.

The majority of our revenues by vendor are derived from our top six suppliers, which, when combined, is a fairly constant percentage of 60% or more of total revenues for the twelve-month periods ended March 31, 2022, and 2021.

Cost of sales: The 14.0% increase in cost of sales was due to the increase in product sales and a change in product sales mix, with a greater portion from sales of third-party maintenance, software assurance, subscription/SaaS licenses, and services, for which the revenues and cost of sales are presented on a net basis, and with a greater portion from services revenue, for which we have higher profit margins.

Gross profit: Gross profit increased 17.9%, to $408.2 million, compared to $346.2 million in the prior fiscal year due to higher margins. Gross margin on product sales increased 60 basis points to 21.2% due a shift in product mix to a greater proportion of sales of third-party maintenance, software assurance, subscription/SaaS licenses, and services. The gross margin on services decreased 10 basis points to 38.0%. for the year ended March 31, 2022, due to a slight decrease in professional services gross margin, as compared to the prior year. Vendor incentives earned as a percentage of sales for the year ended March 31, 2022 increased by 20 basis points, which has a positive effect on gross margin, as compared to the prior year.

Selling, general, and administrative expenses: Selling, general, and administrative expenses of $283.7 million for the year ended March 31, 2022, increased by $27.5 million, or 10.7% compared to the prior year, mainly driven by an increase in salaries and benefits.

Salaries and benefits, including variable compensation, increased $24.1 million or 10.9% to $245.9 million, compared to $221.8 million during the prior year, due to higher variable compensation a result of the increase in gross profit. Our technology segment had 1,543 employees as of March 31, 2022, which is an increase of 17, or 1.1%, from 1,526 on March 31, 2021.

General and administrative expenses, increased $3.8 million, or 11.1%, to $37.6 million during the year ended March 31, 2022, compared to $33.9 million the prior year. Contributing to the year over year increase in general and administrative expense were increases in travel and entertainment, and software, subscription, and maintenance expenses.

Depreciation and amortization expense: Depreciation and amortization expense increased $0.7 million, or 5.0%, to $14.5 million during the fiscal year ended March 31, 2022, compared to $13.8 million in the prior year.

Interest and financing costs: Interest and financing costs were $0.9 million for the year ended March 31, 2022, compared to $0.5 million in the prior year.

Segment earnings: As a result of the foregoing, operating income increased $33.3 million, or 44.1%, to $109.0 million for the year ended March 31, 2022, compared to $75.7 million in the prior year and Adjusted EBITDA increased 35.1% to $131.4 million for the year ended March 31, 2022, compared to $97.2 million in the prior year.

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FINANCING SEGMENT

The results of operations for our financing segment for the years ended March 31, 2022, and 2021 were as follows (in thousands):

	Year Ended March 31,				Change
	2022		2021
Net sales	$	87,983	$	60,369	$	27,614		45.7	%
Cost of sales		35,154		13,050		22,104		169.4	%
Gross profit		52,829		47,319		5,510		11.6	%
Selling, general, and administrative		13,427		15,053		(1,626	)	(10.8	%)
Depreciation and amortization		111		112		(1	)	(0.9	%)
Interest and financing costs		975		1,484		(509	)	(34.3	%)
Operating expenses		14,513		16,649		(2,136	)	(12.8	%)
Operating income	$	38,316	$	30,670	$	7,646		24.9	%
Adjusted EBITDA	$	38,651	$	31,026	$	7,625		24.6	%

Net sales: Net sales increased by $27.6 million, or 45.7%, to $88.0 million for the year ended March 31, 2022. The increase was due to higher post contract and portfolio revenue offset slightly by a decrease in other financing revenues. Post-contract revenue increased by $26.7 million to $50.5 million as compared to $23.8 million in the prior year due to proceeds from early lease buyouts and sales of off-lease equipment. Portfolio revenue increased $1.3 million to $17.8 million, due to increases in operating lease income offset by decreased sales-type lease earnings over the prior fiscal year. Other financing revenues decreased $4.1 million to $1.5 million, compared to the prior year primarily due to lower profit recognized from signing new lease extensions with customers where the prior lease was classified as an operating lease and the new modified lease was determined to be sales-type lease. Transactional gains increased $3.7 million to $18.2 million compared to the prior year driven by higher net gains on sale of notes receivable. Total proceeds from sales of financing receivables were $855.1 million and $364.0 million for the years ended March 31, 2022, and 2021, respectively.

Cost of sales: Cost of sales increased 169.4%, or $22.1 million, to $35.2 million for the year ended March 31, 2022, as compared to the prior year, due to an increase in the cost of equipment from early lease buyouts and sales of off-lease equipment of $18.2 million and an increase in operating lease depreciation of $3.7 million. Gross profit increased 11.6%, or $5.5 million, to $52.8 million primarily due to gains on several significant transactions.

Selling, general, and administrative expenses: Selling, general, and administrative expenses were $13.4 million and $15.1 million for years ended March 31, 2022, and 2021, respectively. This decrease of $1.6 million was driven by a reduction in our reserve for credit losses, and salaries and benefits. Our financing segment employed 34 people as of March 31, 2022 and 2021. Certain support functions for the financing segment are shared resources with the technology segment.

Interest and financing costs: Interest and financing costs decreased by $0.5 million, or 34.3%, to $1.0 million for the year ended March 31, 2022, as compared to the prior year. Our total notes payable for the financing segment decreased as of March 31, 2022, to $21.2 million from $56.1 million for the prior year. Our weighted average interest rate for our non-recourse notes payable was 3.59% as of March 31, 2022, compared to 3.35% for March 31, 2021.

Segment earnings: As a result of the foregoing, operating income increased $7.6 million, or 24.9%, to $38.3 million for the year ended March 31, 2022, as compared to the prior year. Adjusted EBITDA increased $7.6 million, or 24.6%, to $38.7 million for the year ended March 31, 2022, as compared to the prior year.

CONSOLIDATED

Other income: Other income and expense during the year ended March 31, 2022, netted to an expense of $0.4 million and included foreign exchange rate loss of $0.5 million. Other income and expense during the year ended March 31, 2021, was income of $0.6 million and included foreign exchange rate gain of $0.5 million and interest income of $0.1 million.

Income taxes: Our effective income tax rates for the years ended March 31, 2022, and 2021 were 28.1% and 30.4%, respectively. The decrease in our effective income tax rate year over year is primarily due to prior year unfavorable adjustments to the federal benefit from state taxes and non-deductible executive compensation.

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Net earnings: Net earnings were $105.6 million for the year ended March 31, 2022, an increase of 41.9% or $31.2 million as compared to $74.4 million in the prior fiscal year. The net earnings increase was due primarily to the increase in operating profits from our technology segment, and a lower income tax rate in the current year compared to the year ended March 31, 2021.

Basic and fully diluted earnings per common share for the year ended March 31, 2022, were $3.96 and $3.93, respectively, and both increased 41.9% over the prior year. Basic and fully diluted earnings per common share were $2.79 and $2.77, respectively, for the year ended March 31, 2021.

Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share were 26.6 million and 26.9 million, respectively, for year ended March 31, 2022. Weighted average common shares outstanding used in the calculation of basic and diluted earnings per common share were 26.7 million and 26.8 million, respectively, for year ended and March 31, 2021.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY OVERVIEW

We finance our operations through funds generated from operations and through borrowings. 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.

Our borrowings in our technology segment are through our WFCDF credit facility. Our borrowings in our financing segment are primarily through secured borrowings that involve transferring all or part of the contractual payments due to us to third-party financing institutions.

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.

CASH FLOWS

The following table summarizes our sources and uses of cash for the years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022			2021
Net cash provided by (used in) operating activities	$	(20,571	)	$	129,507
Net cash used in investing activities		(1,259	)		(35,756	)
Net cash provided by (used in) financing activities		47,176			(49,802	)
Effect of exchange rate changes on cash		470			(618	)
Net increase in cash and cash equivalents	$	25,816		$	43,331

Cash flows from operating activities

Our operating activities used $20.6 million during the year ended March 31, 2022, compared to providing $129.5 million during the year ended March 31, 2021. The following table provides a breakdown of operating cash flows by segment for the years end March 31, 2022, and 2021 (in thousands):

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	Year Ended March 31,
	2022			2021
Technology segment	$	(20,243	)	$	153,332
Financing segment		(328	)		(23,825	)
Net cash provided by (used in) operating activities	$	(20,571	)	$	129,507

Technology Segment: During the year ended March 31, 2022, operating cash flows used by our technology segment were $20.2 million due to increases in working capital, primarily increases in inventories and accounts receivable, offset by earnings. Cash provided by the accounts payable – floor plan facility was $46.7 million. The accounts payable – floor plan is a facility used to manage working capital needs and we are required to present changes in this balance as financing activity in our consolidated statement of cash flows.

During the year ended March 31, 2021, operating cash flows provided by our technology segment were $153.3 million due to cash generated from earnings and changes in working capital. In addition, cash used by the accounts payable – floor plan facility was $34.4 million.

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 March 31,
	2022			2021
(DSO) Days sales outstanding (1)		69			69
(DIO) Days inventory outstanding (2)		25			15
(DPO) Days payable outstanding (3)		(46	)		(47	)
Cash conversion cycle		48			37

 

(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, product, and services for the same three-month period.

Our standard payment term for customers is between 30-60 days; however, certain customers or orders may be approved for extended payment terms. Our DSOs for the quarters ended March 31, 2022 and 2021 were greater than our standard payment terms primarily due to a significant proportion of sales in those quarters to customers with payment terms greater than or equal to net 60 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 cash conversion cycle increased to 48 days for March 31, 2022 compared to 37 days for March 31, 2021 as DIO increased by 10 days and DPO decreased by 1 day from March 31, 2021 to March 2022.

Inventory, which represents equipment ordered by customers but not yet delivered, increased 121.6% to $155.1 million as of March 31, 2022, up from $70.0 million as of March 31, 2021, partially due to ongoing projects with customers.

Financing Segment: During the year ended March 31, 2022, our financing segment used $0.3 million from operating activities, primarily due to an increase in accounts receivable and deferred costs and decreases in accounts payable, partially offset by net earnings.

During the year ended March 31, 2021, our financing segment used $23.8 million from operating activities, primarily due to the issuance of new financing receivables.

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Cash flows related to investing activities

During the year ended March 31, 2022, we used $1.3 million from investing activities, consisting of $23.2 million for purchases of property, equipment, and operating lease equipment, partially offset by $21.9 million of proceeds from the sale of property, equipment, and operating lease equipment.

During the year ended March 31, 2021, we used $35.8 million from investing activities, consisting of $27.0 million for our acquisition of SMP and $11.5 million for purchases of property, equipment, and operating lease equipment, and partially offset by $2.8 million of proceeds from the sale of property, equipment, and operating lease equipment.

Cash flows from financing activities

During the year ended March 31, 2022, financing activities provided $47.2 million. We had net repayments of notes payable in our technology segment of $6.7 million, offset by net borrowings of notes payable of $20.8 million by our financing segment. Additionally, we had cash inflows of $46.7 million from net borrowings on the floor plan facility and cash outflows of $13.6 million from the repurchase of common stock.

During the year ended March 31, 2021, we used $49.8 million from financing activities. We had net repayments on the accounts receivable component of our credit facility of $35.0 million, partially offset by net borrowings of non-recourse and recourse notes payable of $27.1 million by our financing segment. Contributing to cash outflows was net repayments on floor plan facility of $34.4 million, repurchase of common stock of $6.9 million, and payments to payoff contingent consideration agreements and hold backs from prior fiscal year acquisitions of $0.6 million.

Our borrowing of non-recourse and recourse notes payable primarily arises from our financing segment when we transfer contractual payments due to us under 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 and 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. As a result of COVID-19, credit markets have tightened. Our lenders are more discerning and are taking longer to approve transactions. In addition, certain lenders have narrowed their demand to certain types of transactions and/or credit quality and excluding others. For example, some lenders have declined transactions that have longer terms or transactions with certain market segments. Therefore, we may no longer be able to transfer certain receivables to financial institutions which may result in investing our capital or declining the transaction. In addition, interest rates have been rising. In order to preserve our expected internal rate of return, we generally quote rates that are indexed. Some of our lenders will not commit to rates for a length of time, resulting in exposure to us if the rates rise and we cannot pass such exposure to the customer.

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CREDIT FACILITY – TECHNOLOGY SEGMENT

We finance the operations of our subsidiaries ePlus Technology, inc., ePlus Technology Services, inc. and SLAIT Consulting, LLC (collectively, the “Borrowers”) in our technology segment through a credit facility with WFCDF. The WFCDF credit facility has a floor plan facility and a revolving credit facility.

On October 13, 2021, the Borrowers amended, restated, and replaced in their entirety the then-existing credit agreements with WFCDF. The new credit facility is established by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floorplan facility in favor of the Borrowers 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”).

Please refer to Note 8 “Credit Facility and Notes Payable” to the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements” for additional information concerning our 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.

Floor plan facility

We finance most purchases of products for sale to our customers through the floor plan facility. Once our customer places a purchase order with us and we have approved their credit, we place an order for the desired products with one of our vendors. Our vendors are generally paid by the floor plan facility and our liability is reflected in “accounts payable—floor plan” in our consolidated balance sheets.

Most customer payments to us are remitted to our lockbox accounts. Once payments are cleared, the monies in the lockbox accounts are automatically and daily transferred to our operating account. We pay down the floor plan facility on three specified dates each month, generally 30-60 days from the invoice date. 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.

As of March 31, 2022, and March 31, 2021, we had a maximum credit limit of $375.0 million and $275.0 million, respectively, and an outstanding balance on the floor plan facility of $145.3 million and $98.7 million, respectively. On our balance sheet, our liability under the floor plan facility is presented as part of as accounts payable – floor plan.

Revolving credit facility

The outstanding balance under the revolving credit facility is presented as part of recourse notes payable- current on our consolidated balance sheets. Our borrowings and repayments under the revolving credit facility are included in “borrowings of non-recourse and recourse notes payable” and “repayments of non-recourse and recourse notes payable,” respectively, within cash flows from the financing activities in our consolidated statements of cash flows.

As of March 31, 2022, and March 31, 2021, we did not have any outstanding balance under the revolving credit facility. The maximum credit limit under this facility was $100.0 million as of both March 31, 2022, and March 31, 2021.

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 the performance obligations under all service contracts for which there is a performance guarantee, and we believe that any liability incurred in connection with these guarantees would not have a material adverse effect on our consolidated statements of operations.

OFF-BALANCE SHEET ARRANGEMENTS

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of March 31, 2022, and 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 forces. We may also start offices or configuration centers 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. As a result, we may require additional financing to fund our strategy, implementation, and potential future acquisitions, which may include additional debt and equity financing. The impacts of COVID-19 may limit or eliminate our access to capital. While the future is uncertain, we do not believe our credit facility will be terminated by the lender or us. Our lending partners in our financial segment have tightened credit availability and are more discerning in their approval process. However, currently we have funding resources available for our transactions.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

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

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to the worldwide impacts from COVID-19, inflation, interest rate increases, currency fluctuations, reduction in IT spending, any reduction of expected residual values related to the equipment under our leases, the timing and mix of specific transactions, the reduction of manufacturer incentive programs, pricing discounts offered by manufacturers at their year ends, pricing increases, and other factors. Quarterly operating results could also fluctuate as a result of our sale of equipment in our lease portfolio at the expiration of a lease term or prior to such expiration, to a lessee or to a third-party and the transfer of financial assets. Sales of equipment and transfers of financial assets may have the effect of increasing revenues and net income during the quarter in which the sale occurs and reducing revenues and net income otherwise expected in subsequent quarters. See Part I, Item 1A, “Risk Factors” herein.

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.

CONTRACTUAL OBLIGATIONS

Our material contractual obligations consist of payments on recourse and non-recourse notes payable and lease liabilities. Please refer to Note 4, “Lessee accounting” and Note 8, “Notes payable and credit facility” in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding the maturities of these obligations. Additionally, we have contractual obligations of $7.8 million over the next 5 years for certain hosted software and data center services.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our financial position is exposed to a variety of risks, including interest rate risks and foreign currency. Additionally, we have seen an increase in these risks and related uncertainties with increased volatility in the financial markets in the current environment with supply chain shortages.

INTEREST RATE RISK

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

43

FOREIGN CURRENCY RISK

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 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 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the consolidated financial statements and schedules listed in the accompanying “Index to Financial Statements and Schedules.”

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures, or “disclosure controls”, as of the end of the period covered by this report as defined in 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 Form 10-K annual report, is recorded, processed, summarized, and reported within the time periods specified in the US Securities and Exchange Commission’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 on the evaluation described above, the CEO and CFO concluded that disclosure controls and procedures as of March 31, 2022, were effective in ensuring information required to be disclosed in our SEC reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

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Our management performed an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2022, utilizing the criteria described in the “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The objective of this assessment was to determine whether our internal control over financial reporting was effective as of March 31, 2022.

Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on this assessment, management determined that, as of March 31, 2022, the Company maintained effective internal control over financial reporting.

Deloitte & Touche LLP, an independent registered public accounting firm, who audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has also audited the effectiveness of the Company’s internal control over financial reporting as stated in its report appearing on page F-5.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended March 31, 2022, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

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

ITEM 9B. OTHER INFORMATION

None.

PART III

Except as set forth below, the information required by Items 10, 11, 12, 13 and 14 is incorporated by reference from our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the close of our fiscal year.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information about our directors may be found under the caption “Proposal 1 – Election of Directors” in our Proxy Statement for the 2022 Annual Meeting of Stockholders (the “Proxy Statement”). The information in the Proxy Statement set forth under the captions of “Corporate Governance – Code of Conduct” and “Board Committees” is incorporated herein by reference.

The information under the heading “Executive Officers” in Item 1 of this report is incorporated in this section by reference.

CODE OF ETHICS

We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer, principal accounting officer and our Board. The Code of Conduct is available on our website at www.eplus.com/investors/corporate-governance-legal/code-of-conduct. We will disclose on our website any amendments to or waivers from any provision of the Code of Conduct that applies to any of the directors or executive officers.

ITEM 11. EXECUTIVE COMPENSATION

The information in the Proxy Statement set forth under the captions “Director Compensation,” “Compensation Discussion and Analysis,” “2022 Executive Compensation,” and “Corporate Governance – Compensation Committee Interlocks and Insider Participation” is incorporated herein by reference.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information in the Proxy Statement set forth under the captions “Equity Compensation Plan Information” and “Stock Ownership” is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information in the Proxy Statement set forth under the caption “Corporate Governance - Related Person Transactions” and “Independence of Our Board of Directors” is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information in the Proxy Statement set forth under the caption “Proposal 3 – Ratification of the Selection of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for our Fiscal Year Ending March 31, 2022” is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) FINANCIAL STATEMENTS

The consolidated financial statements listed in the accompanying Index to Financial Statements and Schedules are filed as a part of this report and incorporated herein by reference.

(a)(2) FINANCIAL STATEMENT SCHEDULE

See “Financial Statement Schedule II - Valuation and Qualifying Accounts” on page S-1.

(a)(3) EXHIBIT LIST

Exhibits 10.2 through 10.12 are management contracts or compensatory plans or arrangements.

Exhibit No.	Exhibit Description
3.1	ePlus inc. Amended and Restated Certificate of Incorporation, as last amended November 9, 2021 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2021).
3.2	Amended and Restated Bylaws of ePlus inc., as of March 2, 2022.
4.1	Specimen Certificate of Common Stock (Incorporated herein by reference to Exhibit 4.1 to our Registration Statement on Form S-1 (File No. 333-11737) originally filed on September 11, 1996).
4.2	Description of ePlus inc.’s securities registered under Section 12 of the Securities Exchange Act of 1934.
10.1	Form of Indemnification Agreement entered into by and between ePlus and its directors and officers (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 23, 2016).
10.2	Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017).
10.3	Amendment #1, effective July 16, 2018, to Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 18, 2018).
10.4	Amendment #2, effective November 14, 2019, to Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).

46

10.5	Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Elaine D. Marion (Incorporated herein by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017).
10.6	Amendment #1, effective November 14, 2019, to Amended and Restated Employment Agreement, effective September 6, 2017, by and between ePlus inc. and Elaine D. Marion (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).
10.7	Employment Agreement, effective May 7, 2018, by and between ePlus inc. and Darren S. Raiguel. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 9, 2018).
10.8	Amendment No. 1, effective November 14, 2019, to Amended and Restated Employment Agreement, effective May 7, 2018, by and between ePlus inc. and Darren S Raiguel. (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 10-Q filed on February 6, 2020).
10.9	ePlus inc. 2017 Non-Employee Director Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.6 to our Current Report on Form 10-Q for the period ended December 31, 2021).
10.10	ePlus inc. 2012 Employee Long-term Incentive Plan (updated to reflect stock split effected March 31, 2017) (Incorporated herein by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2017).
10.11	ePlus inc. Cash Incentive Plan, effective April 1, 2018, (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July 18, 2018).
10.12	ePlus 2021 Employee Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 10-Q for the period ended December 31, 2021).
10.13	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).
10.14	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).
10.15	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).
10.16	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).
21	Subsidiaries of ePlus inc.
23	Consent of Independent Registered Public Accounting Firm.
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).

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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	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document)

ITEM 16. FORM 10-K SUMMARY

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or Section 15(d) 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.

/s/ MARK P. MARRON

By: Mark P. Marron

Chief Executive Officer and President

Date: May 25, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ MARK P. MARRON

By: Mark P. Marron

Chief Executive Officer, President, and Director

(Principal Executive Officer)

Date: May 25, 2022

/s/ ELAINE D. MARION

By: Elaine D. Marion, Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: May 25, 2022

/s/ BRUCE M. BOWEN

By: Bruce M. Bowen, Director

Date: May 25, 2022

/s/ JOHN E. CALLIES

By: John E. Callies, Director

Date: May 25, 2022

/s/ C. THOMAS FAULDERS, III

By: C. Thomas Faulders, III, Chairman

Date: May 25, 2022

/s/ ERIC D. HOVDE

By: Eric D. Hovde, Director

Date: May 25, 2022

/s/ IRA A. HUNT

By: Ira A. Hunt, Director

Date: May 25, 2022

/s/ MAUREEN F. MORRISON

By: Maureen F. Morrison

Date: May 25, 2022

/s/ BEN XIANG

By: Ben Xiang, Director

Date: May 25, 2022

49

ePlus inc. AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

	PAGE
Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP (PCAOB ID 34)	F-2
Consolidated Balance Sheets as of March 31, 2022 and 2021	F-6
Consolidated Statements of Operations for the years ended March 31, 2022, 2021 and 2020	F-7
Consolidated Statements of Comprehensive Income for the years ended March 31, 2022, 2021 and 2020	F-8
Consolidated Statements of Cash Flows for the years ended March 31, 2022, 2021 and 2020	F-9
Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2022, 2021 and 2020	F-11
Notes to Consolidated Financial Statements	F-12

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

ePlus inc.

Herndon, Virginia

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ePlus inc. and subsidiaries (the “Company”) as of March 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended March 31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 25, 2022, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Gross Versus Net Recognition of Sales of Third-Party Software – Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Company is typically the principal in sales of third-party software. Sales are recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. The Company recognizes revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the software to the customer. The Company is also the agent in sales of third-party maintenance, software support, and services as the third-party controls the service until it is transferred to the customer. Similarly, the Company is the agent in sales of third-party software and accompanying third-party support when the third-party software benefits the customer only in conjunction with the accompanying support. In these sales, the Company considers the third-party software and support as inputs to a single performance obligation. In all these sales where the Company is the agent, the Company recognizes sales on a net basis at the point that their customer and vendor accept the terms and conditions of the arrangement.

F-2

Auditing the Company’s determination of gross or net recognition of third-party software and support sales involved a high degree of subjectivity as it required the evaluation of whether the third-party software benefits the customer only in conjunction with the accompanying support. When the support is determined to be critical or essential to the software, the transaction is viewed as one combined performance obligation, and revenue is recognized net of related costs.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s conclusion related to the recognition of sales of third-party software included the following, among others:

• We tested the design and operating effectiveness of management’s controls over the determination of gross or net recognition of third-party software and support sales.

• For a selection of contracts, we performed the following procedures:

– Inspected the customer invoice and purchase order to determine whether the sale represented a valid transaction with a customer.

– Compared the cost per the Company’s records to the cost per the vendor invoice.

– Evaluated the sale to determine whether it constituted a single or multiple performance obligation(s) through inspection of the customer invoice, purchase order, and information on vendor websites accessed through third-party search engines.

– Evaluated the sale to determine whether there was accompanying third-party support related to the software, and whether the support was separately identifiable or essential to the functionality of the software through inspection of customer invoices, purchase orders, information on vendor websites accessed through third-party search engines and inquiries with management, as necessary.

Transfers of Financial Assets – Refer to Note 3 to the financial statements

Critical Audit Matter Description

The Company enters into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for in accordance with Codification Topic 860. These transfers are accounted for as either a sale or as a pledge of collateral in a secured borrowing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. For transfers accounted for as sales, the Company derecognizes the carrying value of the asset transferred plus any liability and recognizes a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations.

Auditing the Company’s determination of whether the transfer should be accounted for as a secured borrowing or a sale involved a high degree of subjectivity. This subjectivity stems from management’s assessment of whether the transferred assets have been isolated from the transferor.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s conclusion related to the transfer of financial assets included the following, among others:

• We tested the design and operating effectiveness of management’s controls over the transfer of financial assets, including management’s controls over the evaluation of the terms of loan documents and accompanying investor data, assignment agreements, and the calculation of the gain or loss.

• For a selection of transactions, we evaluated the Company’s determination of sale or secured borrowing, by evaluating, among other factors, if the transferred assets have been isolated from the Company. Specifically, we performed the following procedures:

– Obtained the executed transfer agreement and evaluated whether the Company:

■ Assigned its rights, titles, interests, estates, claims, and demands to the third-party assignee

■ Retained any rights with respect to the payments assigned to the third-party assignee or had been appropriately isolated from the assets. We evaluated opinions from outside legal counsel, when applicable.

F-3

– Obtained and inspected the cash proceeds support from the transfer and compared the cash received to the selling price.

– Tested the mathematical accuracy of management’s calculation of the gain or loss based on the cash proceeds and the receivable balance as of date of sale.

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia

May 25, 2022

We have served as the Company’s auditor since 1990.

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

ePlus inc.

Herndon, Virginia

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of ePlus inc. and subsidiaries (the “Company”) as of March 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 31, 2022, of the Company and our report dated May 25, 2022 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia

May 25, 2022

F-5

ePlus inc. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	March 31, 2022			March 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	155,378		$	129,562
Accounts receivable—trade, net		430,380			391,567
Accounts receivable—other, net		48,673			41,053
Inventories		155,060			69,963
Financing receivables—net, current		61,492			106,272
Deferred costs		32,555			28,201
Other current assets		13,944			10,976
Total current assets		897,482			777,594
Financing receivables and operating leases—net		64,292			90,165
Deferred tax asset—net		5,050			1,468
Property, equipment and other assets		45,586			42,289
Goodwill		126,543			126,645
Other intangible assets—net		27,250			38,614
TOTAL ASSETS	$	1,166,203		$	1,076,775
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	136,161		$	165,162
Accounts payable—floor plan		145,323			98,653
Salaries and commissions payable		39,602			36,839
Deferred revenue		86,469			72,802
Recourse notes payable—current		7,316			5,450
Non-recourse notes payable—current		17,070			50,397
Other current liabilities		28,095			30,061
Total current liabilities		460,036			459,364
Recourse notes payable - long-term		5,792			12,658
Non-recourse notes payable - long-term		4,108			5,664
Other liabilities		35,529			36,679
TOTAL LIABILITIES		505,465			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; 50,000 shares authorized; 26,886 outstanding at March 31, 2022 and 27,006 outstanding at March 31, 2021		270			145
Additional paid-in capital		159,480			152,366
Treasury stock, at cost, 130 shares at March 31, 2022 and 1,987 shares at March 31, 2021		(6,734	)		(75,372	)
Retained earnings		507,846			484,616
Accumulated other comprehensive income—foreign currency translation adjustment		(124	)		655
Total Stockholders’ Equity		660,738			562,410
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,166,203		$	1,076,775

See Notes to Consolidated Financial Statements.

F-6

ePlus inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Year Ended March 31,
	2022			2021		2020
Net sales
Product	$	1,580,394		$	1,366,158	$	1,395,288
Services		240,625			202,165		193,116
Total		1,821,019			1,568,323		1,588,404
Cost of sales
Product		1,210,943			1,049,677		1,076,773
Services		149,094			125,092		120,440
Total		1,360,037			1,174,769		1,197,213
Gross profit		460,982			393,554		391,191
Selling, general, and administrative		297,117			271,263		279,182
Depreciation and amortization		14,646			13,951		14,156
Interest and financing costs		1,903			2,005		2,574
Operating expenses		313,666			287,219		295,912
Operating income		147,316			106,335		95,279
Other income (expense)		(432	)		571		680
Earnings before tax		146,884			106,906		95,959
Provision for income taxes		41,284			32,509		26,877
Net earnings	$	105,600		$	74,397	$	69,082
Net earnings per common share—basic	$	3.96		$	2.79	$	2.59
Net earnings per common share—diluted	$	3.93		$	2.77	$	2.57
Weighted average common shares outstanding—basic		26,638			26,674		26,654
Weighted average common shares outstanding—diluted		26,866			26,834		26,830

See Notes to Consolidated Financial Statements.

F-7

ePlus inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended March 31,
	2022			2021		2020
NET EARNINGS	$	105,600		$	74,397	$	69,082
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments		(779	)		1,646		(720	)
Other comprehensive income (loss)		(779	)		1,646		(720	)
TOTAL COMPREHENSIVE INCOME	$	104,821		$	76,043	$	68,362

See Notes to Consolidated Financial Statements.

F-8

ePlus inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended March 31,
	2022			2021			2020
Cash flows from operating activities:
Net earnings	$	105,600		$	74,397		$	69,082
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		24,305			19,991			19,156
Provision for credit losses		(102	)		1,436			1,004
Share-based compensation expense		7,114			7,169			7,954
Deferred taxes		(3,581	)		(4,198	)		(2,185	)
Payments from lessees directly to lenders—operating leases		(32	)		(34	)		(70	)
Gain on disposal of property, equipment, and operaing lease equipment		(4,136	)		(2,742	)		(814	)
Changes in:
Accounts receivable		(50,803	)		(5,056	)		(64,388	)
Inventories-net		(85,453	)		(16,798	)		115
Financing receivables—net		8,832			(42,104	)		(109,355	)
Deferred costs and other assets		(10,560	)		(16,503	)		(20,982	)
Accounts payable-trade		(25,187	)		76,772			(8,884	)
Salaries and commissions payable, deferred revenue, and other liabilities		13,432			37,177			35,193
Net cash provided by (used in) operating activities		(20,571	)		129,507			(74,174	)
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment		21,923			2,791			1,705
Purchases of property, equipment and operating lease equipment		(23,182	)		(11,513	)		(7,009	)
Cash used in acquisitions, net of cash acquired		-			(27,034	)		(15,035	)
Net cash used in investing activities		(1,259	)		(35,756	)		(20,339	)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable		114,105			66,403			141,369
Repayments of non-recourse and recourse notes payable		(99,991	)		(74,328	)		(31,880	)
Repurchase of common stock		(13,608	)		(6,948	)		(14,425	)
Repayments of financing of acquisitions		-			(556	)		(5,763	)
Net borrowings (repayments) on floor plan facility		46,670			(34,373	)		11,333
Net cash provided by (used in) financing activities		47,176			(49,802	)		100,634
Effect of exchange rate changes on cash		470			(618	)		294
Net increase in cash and cash equivalents		25,816			43,331			6,415
Cash and cash equivalents, beginning of period		129,562			86,231			79,816
Cash and cash equivalents, end of period	$	155,378		$	129,562		$	86,231

F-9

CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)

	Year Ended March 31,
	2022			2021			2020
Supplemental disclosures of cash flow information:
Cash paid for interest	$	1,714		$	1,436		$	2,260
Cash paid for income taxes	$	47,143		$	31,690		$	28,356
Cash paid for amounts included in the measurement of lease liabilities	$	4,653		$	5,780		$	5,613
Schedule of non-cash investing and financing activities:
Proceeds from sale of property, equipment, and leased equipment	$	18		$	2,045		$	-
Purchases of property, equipment, and operating lease equipment	$	(98	)	$	(372	)	$	(329	)
Consideration for acquisitions	$	-		$	-		$	(241	)
Borrowing of non-recourse and recourse notes payable	$	58,619		$	121,826		$	114,439
Repayments of non-recourse and recourse notes payable	$	(32	)	$	(34	)	$	(70	)
Vesting of share-based compensation	$	8,481		$	7,937		$	8,990
New operating lease assets obtained in exchange for lease obligations	$	2,653		$	1,146		$	6,035

See Notes to Consolidated Financial Statements.

F-10

ePlus inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

	Common Stock						Additional Paid-In		Treasury			Retained			Accumulated Other Comprehensive
	Shares			Par Value			Capital		Stock			Earnings			Income			Total
Balance, April 1, 2019		27,222		$	143		$	137,243	$	(53,999	)	$	341,137		$	(271	)	$	424,253
Issuance of restricted stock awards		186			1			-		-			-			-			1
Share-based compensation		-			-			7,954		-			-			-			7,954
Repurchase of common stock		(408	)		-			-		(14,425	)		-			-			(14,425	)
Net earnings		-			-			-		-			69,082			-			69,082
Foreign currency translation adjustment		-			-			-		-			-			(720	)		(720	)
Balance, March 31, 2020		27,000		$	144		$	145,197	$	(68,424	)	$	410,219		$	(991	)	$	486,145
Issuance of restricted stock awards		200			1			-		-			-			-			1
Share-based compensation		-			-			7,169		-			-			-			7,169
Repurchase of common stock		(194	)		-			-		(6,948	)		-			-			(6,948	)
Net earnings		-			-			-		-			74,397			-			74,397
Foreign currency translation adjustment		-			-			-		-			-			1,646			1,646
Balance, March 31, 2021		27,006		$	145		$	152,366	$	(75,372	)	$	484,616		$	655		$	562,410
Issuance of restricted stock awards		163			1			-		-			-			-			1
Share-based compensation		-			-			7,114		-			-			-			7,114
Repurchase of common stock		(283	)		-			-		(13,608	)		-			-			(13,608	)
Stock split effected in the form of a dividend					135			-		-			(135	)		-			-
Retirement of treasury stock					(11	)		-		82,246			(82,235	)		-			-
Net earnings		-			-			-		-			105,600			-			105,600
Foreign currency translation adjustment		-			-			-		-			-			(779	)		(779	)
Balance, March 31, 2022		26,886		$	270		$	159,480	$	(6,734	)	$	507,846		$	(124	)	$	660,738

See Notes to Consolidated Financial Statements

F-11

ePlus inc. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of and for the Years ended March 31, 2022, 2021, and 2020

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 Annual Report on Form 10-K as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional, and managed services and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises in the United States (“US”) and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, Singapore, and Israel.

BASIS OF PRESENTATION — The 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 acquired businesses are included in the consolidated financial statements from the dates of acquisition.

USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual asset values, vendor consideration, lease classification, goodwill and intangibles, 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.

STOCK SPLIT — On December 13, 2021, we completed a two-for-one stock split in the form of a stock dividend. References made to outstanding shares or per share amounts in the accompanying financial statements and disclosures have been retroactively adjusted for this stock split.

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We write off financing receivables when we deem them to be uncollectable. Since the onset of the COVID-19 pandemic, we have measured our allowance using higher than historical loss rates to reflect forecasted credit deterioration.

BUSINESS COMBINATIONS — We account for business combinations using the acquisition method, which requires that the total purchase price for each of the acquired entity be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The allocation process requires an analysis of intangible assets, such as customer relationships, trade names, acquired contractual rights and assumed contractual commitments and legal contingencies to identify and record all assets acquired and liabilities assumed at their fair value.

We record any premium paid over the fair value of the acquired net assets as goodwill. Our initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. We include the results of operations for the acquired company in our financial statements from the acquisition date.

CASH AND CASH EQUIVALENTS — Cash and cash equivalents consist primarily of interest-bearing accounts and money market funds that consist of short-term US treasury securities. We consider all highly liquid investments, including those with an original maturity of three months or less at the date of acquisition, to be cash equivalents. We have a lockbox account whose purpose is to collect and distribute customer payments under financing arrangements. As of March 31, 2022, we were not holding any amounts in trust for third-party recipients. As of March 31, 2021, we had $0.7 million being held in trust for third-party recipients within our lockbox account. As of March 31, 2022, and March 31, 2021, there were no restrictions on the withdrawal of funds from our money market funds.

CONCENTRATIONS OF RISK — Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, and financing receivables. Cash and cash equivalents may include short-term investments that are maintained principally with financial institutions in the US. Our accounts receivable-trade balance as of March 31, 2022, and 2021 included approximately 14% and 20%, respectively, concentration of invoices due from Verizon Communications Inc. The risk on our accounts receivable and financing receivables is reduced by having a broad customer base in a diverse range of industries and through the ongoing evaluation of collectability of our portfolio. The credit risk is further mitigated by transferring certain of our financing receivables to financial institutions on a non-recourse basis and, for our lease receivables, by owning the underlying asset. A substantial portion of our sales are products from Cisco Systems, which represented approximately 39%, 36%, and 40%, of our technology segment net sales for the years ended March 31, 2022, 2021, and 2020, respectively.

F-12

DEFERRED COSTS — When a contract is within the scope of Accounting Standards Codification (“Codification”) Topic 606, Revenue from Contracts with Customers (“Codification Topic 606”), we defer costs of fulfilling the contract when they generate or enhance resources that will be used by us in satisfying performance obligations in the future. Additionally, we capitalize costs that are incremental to obtaining the contracts, predominately sales commissions, and expense them in proportion to each completed contract performance obligation.

DEFERRED REVENUE — We recognize deferred revenue when cash payments are received or due in advance of our performance.

EARNINGS PER SHARE — Basic earnings per share is calculated by dividing net earnings attributable to common stockholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share reflects the potential dilution of securities that could participate in our earnings, including restricted stock awards during each period.

FAIR VALUE MEASUREMENT — We follow the guidance in Codification Topic 820 Fair Value Measurements (“Codification Topic 820”) which governs how to measure fair value for financial reporting. This topic defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. This topic also establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value:

● Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

● Level 2 – Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in active markets, that are observable for the asset or liability, either directly or indirectly.

● Level 3 – Unobservable inputs for the asset or liability. The fair values are determined based on model-based techniques such as discounted cash flow models using inputs that we could not corroborate with market data.

FINANCIAL INSTRUMENTS — For financial instruments such as cash, short-term investments, accounts receivables, accounts payable and other current liabilities, we consider the recorded value of the financial instruments to approximate the fair value due to their short maturities. On March 31, 2022, the carrying amounts of our notes receivables, recourse and non-recourse payables were $80.5 million, $13.1 million, and $21.2 million, respectively, and their fair values were $80.0 million, $13.1 million, and $21.2 million, respectively. On March 31, 2021, the carrying amounts of our notes receivables, recourse and non-recourse payables were $112.6 million, $18.1 million, and $56.1 million, respectively, and their fair values were $113.2 million, $18.1 million, and $56.3 million, respectively.

FINANCING RECEIVABLES AND OPERATING LEASES — Financing receivables and operating leases consists of notes receivable, sales-type leases, and operating leases. We issue financing receivables for periods generally between 2 to 6 years, with most terms ranging between 3 to 4 years. When we lease equipment under an operating lease, we recognize the underlying asset at cost and depreciate it on a straight-line bases over its estimated useful life. We estimate that the useful life for most information technology (“IT”) equipment under lease is 4 years.

FOREIGN CURRENCY MATTERS — Our functional currency is the US dollar. Our international subsidiaries typically use their local currency as their functional currency. We translate the assets and liabilities of our international subsidiaries into US dollars at the spot rate in effect at the applicable reporting date. We translate the revenues and expenses of our international subsidiaries into US dollars at the average exchange rates in effect during the applicable period. We report the resulting foreign currency translation adjustment as accumulated other comprehensive income (loss), which is reflected as a separate component of stockholders’ equity. We report all foreign currency transaction gains or losses in other income (expense) on our consolidated statement of operations. For the years ended March 31, 2022, 2021, and 2020, we recognized a loss of $0.5 million, a gain of $0.5 million, and a loss of $0.4 million, respectively, due to foreign currency transactions.

F-13

GOODWILL — We test goodwill for impairment on an annual basis, as of October 1, 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 amount.

In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test. We may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.

In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

IMPLEMENTATION COSTS OF A HOSTING ARRANGEMENT- We capitalize implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We classify these capitalized costs in the same balance sheet line item as the amounts prepaid for the related hosting arrangement and we present the amortization of these capitalized costs in the same income statement line item as the service fees for the related hosting arrangement. Our long-term prepaids are included in our consolidated balance sheets as part of property, equipment, and other assets. We amortize the capitalized implementation costs over the term of the hosting arrangement.

INCOME TAXES — Deferred income taxes are accounted for in accordance with Codification Topic 740 Income Taxes (“Codification Topic 740”). Under this method, deferred income tax assets and liabilities are determined based on the temporary differences between the financial statement reporting and tax bases of assets and liabilities, using tax rates currently in effect. Future tax benefits, such as net operating loss carry-forwards, are recognized to the extent that realization of these benefits is considered to be more likely than not. We review our deferred tax assets at least annually and make necessary valuation adjustments.

In addition, we account for uncertain tax positions in accordance with Codification Topic 740. Specifically, the Topic prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related de-recognition, classification, interest and penalties, accounting for interim periods, disclosure, and transition of uncertain tax positions. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense.

INVENTORIES — Inventories are stated at the lower of cost and net realizable value. Cost is determined using a weighted average cost method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Our determination of the net realizable value for inventories is based on the terms of underlying purchase commitments from our customers, current economic conditions including the impact of COVID-19, and other relevant factors.

LESSEE ACCOUNTING — We lease office space for periods up to 6 years. At the lease commencement date, we recognize operating lease liabilities based on the present value of the future minimum lease payments. In determining the present value of future minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date. When the future minimum payments encompass non-lease components, we account for the lease and non-lease components as a single lease component. We elected not to recognize right-of-use assets and lease liabilities for leases with an initial term of 12 months or less. We recognize lease expense on a straight-line basis over the lease term beginning on the commencement date.

F-14

PROPERTY AND EQUIPMENT — Property and equipment are stated at cost, net of accumulated depreciation and amortization. We recognize property and equipment obtained through a business combination at its fair market value as of the acquisition date. We compute depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. We typically depreciate internal use IT equipment over three years, perpetual software licenses over five years, furniture and fixtures over five years, and telecommunications equipment over seven years.

RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term. In a sales-type lease, we recognize the unguaranteed residual asset, measured on a discounted basis, upon lease commencement. In our subsequent accounting for the lease, we increase the unguaranteed residual asset using the effective interest method. We evaluate residual values for impairment on a quarterly basis. We recognize impairments as incurred. We do not recognize upward adjustments due to changes in estimates of residual values.

REVENUE RECOGNITION — We recognize most of our revenues from the sales of third-party products, third-party software, third-party maintenance, software support, and services, ePlus professional and managed services, and hosting ePlus proprietary software. We recognize revenue from these sales under the guidance in Codification Topic 606.

The core principle of Codification Topic 606 is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. We account for a contract under Codification Topic 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance, and collectability of consideration is probable.

Revenues are reported net of sales refunds, including an estimate of future returns based on an evaluation of historical sales returns, current economic conditions, volume, and other relevant factors.

Our contracts with customers may include multiple promises that are distinct performance obligations. For such arrangements, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin.

We recognize revenue when (or as) we satisfy a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. Depending on the nature of each performance obligation, this may be at a point in time or over time, as further described below.

We typically invoice our customers for third-party products upon shipment, unless our customers lease the equipment through our financing segment, in which case the arrangement is accounted for as a lease in accordance with Codification Topic 842, Leases (“Codification Topic 842”). We typically invoice our customers for third-party software upon delivery and third-party services at the point of sale, unless our customers finance these products through our financing segment, in which case we record a financing receivable based on the terms of the arrangement. 

Product revenue

Sales of third-party products

We are the principal in sales of third-party products. As such, we recognize sales on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer.

In some instances, our customers may request that we bill them for a product but retain physical possession of the product until later delivery, commonly known as “bill-and-hold” arrangements. We have warehousing agreements with select customers wherein title to products ordered through the agreements transfers to our customer at the point we invoice the customer and after the product arrives at our warehouse. In these “bill-and-hold” arrangements, we recognize revenue when the customer has ordered the product through their warehousing agreement with us or signed a bill-and-hold agreement with us, the product is identified separately as belonging to the customer, and the product is ready for delivery to the customer.

We recognize sales of off-lease equipment within our financing segment when control passes to the customer, which is typically the date that title to the equipment is transferred per the sales agreement.

F-15

Sales of third-party software

We are typically the principal in sales of third-party software. Sales are recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the software to the customer.

Sales of third-party maintenance, software support, and services

We are the agent in sales of third-party maintenance, software support, and services as the third-party controls the service until it is transferred to the customer. Similarly, we are the agent in sales of third-party software and accompanying third-party support when the third-party software benefits the customer only in conjunction with the accompanying support. In these sales, we consider the third-party software and support as inputs to a single performance obligation. In all these sales where we are the agent, we recognize sales on a net basis at the point that our customer and vendor accept the terms and conditions of the arrangement.

Freight and sales tax

We present freight billed to our customers within sales and the related freight charged to us within cost of sales. We present sales tax collected from customers and remittances to governmental authorities on a net basis.

Financing revenue and other

We account for leases to customers in accordance with Codification Topic 842. We utilize a portfolio approach by grouping together many similar assets being leased to a single customer.

We classify our leases as either sales-type leases or operating leases. We classify leases as sales-type leases if any one of five criteria are met, each of which indicate that the lease transfers control of the underlying asset to the lessee. We classify our other leases as operating leases.

For sales-type leases, upon lease commencement, we recognize the present value of the lease payments and the residual asset discounted using the rate implicit in the lease. When we are financing equipment provided by another dealer, we typically do not have any selling profit or loss arising from the lease. When we are the dealer of the equipment being leased, we typically recognize revenue in the amount of the lease receivable and cost of sales in the amount of the carrying value of the underlying asset minus the unguaranteed residual asset. After the commencement date, we recognize interest income as part of net sales using the effective interest method.

For operating leases, we recognize the underlying asset as an operating lease asset. We depreciate the asset on a straight-line basis to its estimated residual value over its estimated useful life. We recognize the lease payments over the lease term on a straight-line basis as part of net sales.

In all our leases, we recognize variable lease payments, primarily reimbursement for property taxes associated with the leased asset, as part of net sales in the period in which the changes in facts and circumstances on which the variable lease payments are based occur. We exclude from revenues and expenses any sales taxes reimbursed by the lessee.

We also finance third-party software and third-party services for our customers, which we classify as notes-receivable. We recognize interest income on our notes-receivable using the effective interest method.

We account for transfers of our financial assets, under Codification Topic 860 Transfers and Servicing (“Codification Topic 860”). When a transfer meets all the requirements for sale accounting, we derecognize the financial asset and record a net gain or loss that is included in net sales.

Service revenue

Sales of ePlus professional, managed services, and staffing

ePlus professional services offerings include assessments, project management, and staging, configuration, and integration. ePlus managed service offerings range from monitoring and notification to a fully outsourced network management or service desk solution. ePlus staffing delivers a full range of staffing solutions, including short-term, long-term, temporary-to-hire, and direct-hire IT professionals. In all these arrangements, we satisfy our performance obligation and recognize revenue over time.

F-16

In arrangements for ePlus professional services and staffing, we provide services under both time and materials and fixed price contracts. When services are provided on a time and materials basis, we recognize sales at agreed-upon billing rates as services are performed. When services are provided on a fixed fee basis, we recognize sales over time in proportion to our progress toward complete satisfaction of the performance obligation. We typically measure progress based on costs incurred in proportion to total estimated costs, commonly referred to as the “cost-to-cost” method.

In arrangements for ePlus managed services, our arrangement is typically a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). We typically recognize sales from these services on a straight-line basis over the period services are provided.

SHARE-BASED COMPENSATION — We account for share-based compensation in accordance with Codification Topic 718 Compensation—Stock Compensation. We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We account for forfeitures when they occur. There are no additional conditions for vesting other than service conditions.

SOFTWARE DEVELOPMENT COSTS — We capitalize costs for the development of internal use software under the Codification Topic 350-40 Intangibles—Goodwill and Other Intangibles, Subtopic Internal-Use Software. We did not have significant capitalized development costs for internal use software for the year ended March 31, 2022. We capitalized development costs for internal use software of $0.2 million for both the years ended March 31, 2021 and March 31, 2020. We had capitalized costs, net of amortization, of approximately $2.1 million and $3.4 million as of March 31, 2022, and March 31, 2021, respectively, that is included in the accompanying consolidated balance sheets as a component of other intangible assets-net.

TREASURY STOCK — We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity on the accompanying consolidated balance sheets.

VENDOR CONSIDERATION — We receive payments and credits from vendors pursuant to volume incentive programs and shared marketing expense programs. Many of these programs extend over one or more quarters’ sales activities. Different programs have different vendor/program specific milestones to achieve. Amounts due from vendors as of March 31, 2022, and 2021 were $12.9 million and $18.2 million, respectively, which were included within accounts receivable-other, net in the accompanying balance sheets.

We recognize rebates pursuant to volume incentive programs, when the rebate is probable and reasonably estimable, based on a systematic and rational allocation of the cash consideration offered to the underlying transactions that result in our progress toward earning the rebate. When a rebate is not probable or not reasonably estimable, we recognized the rebate as the milestones are achieved or as cash is received.

We recognize rebates pursuant to shared marketing expense programs as a reduction of the related selling and administrative expenses in the period the program occurs when the consideration represents a reimbursement of specific, incremental, identifiable costs. We recognize consideration that exceeds the specific, incremental, identifiable costs as a reduction of cost of sales.

2. REVENUES

CONTRACT BALANCES

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $47.5 million, $54.6 million, and $33.1 million of receivables from contracts with customers included within financing receivables as of March 31, 2022, 2021, and 2020, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	March 31,
	2022		2021		2020
Current (included in deferred revenue)	$	85,826	$	72,299	$	54,486
Non-current (included in other liabilities)	$	30,086	$	26,042	$	16,395

Revenue recognized from the beginning contract liability balance was $57.5 million and $42.2 million for the fiscal year ended March 31, 2022, and 2021, respectively.

F-17

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):

Year ending March 31, 2023	$	45,471
2024		20,021
2025		7,064
2026		1,518
2027 and thereafter		357
Total remaining performance obligations	$	74,431

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. Occasionally, our leases provide the lessee a bargain purchase option.

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022		2021
Net sales	$	14,943	$	27,196
Cost of sales		12,478		17,855
Gross profit	$	2,465	$	9,341

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022		2021
Interest income on sales-type leases	$	3,904	$	7,602
Lease income on operating leases	$	24,711	$	15,864

FINANCING RECEIVABLES—NET

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

March 31, 2022	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	80,517		$	38,788		$	119,305
Unguaranteed residual value (1)		-			9,141			9,141
Unearned income		(2,728	)		(3,604	)		(6,332	)
Allowance for credit losses (2)		(708	)		(681	)		(1,389	)
Total, net	$	77,081		$	43,644		$	120,725
Reported as:
Current	$	45,415		$	16,077		$	61,492
Long-term		31,666			27,567			59,233
Total, net	$	77,081		$	43,644		$	120,725

(1) Includes unguaranteed residual values of $6,424 thousand that we retained after selling the related lease receivable.

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

F-18

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.

The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	18,444
2024		11,267
2025		6,608
2026		1,881
2027 and thereafter		588
Total	$	38,788

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):

	March 31, 2022			March 31, 2021
Cost of equipment under operating leases	$	13,044		$	18,748
Accumulated depreciation		(7,985	)		(7,870	)
Investment in operating lease equipment—net (1)	$	5,059		$	10,878

(1) Amounts include estimated unguaranteed residual values of $1.7 million and $2.5 million as of March 31, 2022, and 2021, respectively.

The following table provides the future scheduled minimum lease rental payments for operating leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	2,402
2024		976
2025		173
Total	$	3,551

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 secured borrowings.

F-19

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of March 31, 2022, and March 31, 2021, we had financing receivables of $21.1 million and $60.5 million, respectively, and operating leases of $2.0 million and $3.3 million, respectively which were collateral for non-recourse notes payable. See Note 8, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. For the years ended March 31, 2022, 2021, and 2020, we recognized net gains of $18.2 million, $14.5 million, and $21.8 million, respectively, and total proceeds from these sales were $855.1 million, $364.0 million, and $593.7 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the services. As of March 31, 2022, and March 31, 2021, we had deferred revenue of $0.5 million and $0.4 million, respectively, for servicing obligations.

In a limited number of transfers accounted for as sales, we indemnified the assignee in the event that the lessee elects to early terminate the lease. As of March 31, 2022, our total potential liability 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. As of March 31, 2022, and 2021, we had right-of-use assets of $6.9 million and $8.8 million, respectively. We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities, respectively. As of March 31, 2022, and 2021, we had current lease liabilities of $3.6 million and $3.9 million, respectively, and long-term lease liabilities of $3.3 million and $5.0 million, respectively. We recognized rent expense of $5.3 million and $6.1 million as part of selling, general, and administrative expenses during the years ended March 31, 2022, and March 31, 2021, respectively.

Supplemental information about the remaining lease terms and discount rates applied as of March 31, 2022, and March 30, 2021, are as follows:

	Year Ended March 31,
Lease term and Discount Rate	2022			2021
Weighted average remaining lease term (months)		29			32
Weighted average discount rate		3.2	%		3.7	%

The following table provides our future lease payments under our operating leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	3,635
2024		1,727
2025		1,301
2026		322
2027 and thereafter		156
Total lease payments		7,141
Less: interest		(271	)
Present value of lease liabilities	$	6,870

F-20

5. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for the years ended March 31, 2022, and March 31, 2021, respectively (in thousands):

	Year ended March 31, 2022									Year ended March 31, 2021
	Goodwill			Accumulated Impairment Loss			Net Carrying Amount			Goodwill		Accumulated Impairment Loss			Net Carrying Amount
Beginning balance	$	135,318		$	(8,673	)	$	126,645		$	126,770	$	(8,673	)	$	118,097
Acquisitions		-			-			-			8,328		-			8,328
Foreign currency translations		(102	)		-			(102	)		220		-			220
Ending balance	$	135,216		$	(8,673	)	$	126,543		$	135,318	$	(8,673	)	$	126,645

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 March 31, 2022, and March 31, 2021, relates to our technology reportable segment, which we also determined to be one reporting unit.

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

In our annual tests as of October 1, 2021, and 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.

We performed our last quantitative goodwill impairment test as of March 31, 2020. At that time, we concluded that the fair value of our technology reporting unit substantially exceeded its carrying value. Our conclusions would not have been impacted by a ten percent change in our estimate of the fair value of the reporting unit.

OTHER INTANGIBLE ASSETS

Our other intangible assets consist of the following as of March 31, 2022, and March 31, 2021 (in thousands):

	March 31, 2022							March 31, 2021
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships & other intangibles	$	77,224	$	(52,087	)	$	25,137	$	77,335	$	(42,115	)	$	35,220
Capitalized software development		10,517		(8,404	)		2,113		10,553		(7,159	)		3,394
Total	$	87,741	$	(60,491	)	$	27,250	$	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 $10.1 million, $10.3 million, and $9.4 million for the years ended March 31, 2022, 2021 and 2020, respectively. The following table provides the future amortization expense for customer relationships and other intangible assets as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	8,024
2024		6,216
2025		4,645
2026		3,156
2027		1,887
2028 and thereafter		1,209
Total	$	25,137

F-21

6. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses for the years ended March 31, 2022, 2021 and 2020 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance as of March 31, 2019	$	1,579		$	505		$	530		$	2,614
Provision for credit losses		627			293			84			1,004
Write-offs and other		(425	)		-			(4	)		(429	)
Balance as of March 31, 2020		1,781			798			610			3,189
Provision for credit losses		367			503			566			1,436
Write-offs and other		(84	)		(89	)		(5	)		(178	)
Balance as of March 31, 2021		2,064			1,212			1,171			4,447
Provision for credit losses		482			(312	)		(272	)		(102	)
Write-offs and other		(135	)		(192	)		(218	)		(545	)
Balance as of March 31, 2022	$	2,411		$	708		$	681		$	3,800

We evaluate our customers using an internally assigned credit quality rating (“CQR”). The CQR categories of our financing receivables are:

• 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, 2022(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	$	35,264	$	28,005	$	1,297	$	345	$	2	$	4	$	64,917	$	(30,274	)	$	34,643
Average CQR		8,922		2,976		758		213		3		-		12,872		(4,763	)		8,109
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	44,186	$	30,981	$	2,055	$	558	$	5	$	4	$	77,789	$	(35,037	)	$	42,752
Lease receivables:
High CQR	$	14,549	$	5,002	$	2,499	$	902	$	50	$	11	$	23,013	$	(3,385	)	$	19,628
Average CQR		10,936		3,092		741		47		72		-		14,888		(347	)		14,541
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	25,485	$	8,094	$	3,240	$	949	$	122	$	11	$	37,901	$	(3,732	)	$	34,169
Total amortized cost (1)	$	69,671	$	39,075	$	5,295	$	1,507	$	127	$	15	$	115,690	$	(38,769	)	$	76,921

(1) Unguaranteed residual values of $6,424 thousand that we retained after selling the related lease receivable is 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.

F-22

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 March 31, 2022 (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	$	187	$	37	$	23	$	247	$	5,307	$	5,554	$	72,235	$	77,789
Lease receivables		115		325		430		870		639		1,509		36,392		37,901
Total	$	302	$	362	$	453	$	1,117	$	5,946	$	7,063	$	108,627	$	115,690

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 March 31, 2022 and March 31, 2021.

7. PROPERTY AND EQUIPMENT—NET

Property and equipment—net is a component of Property, equipment, and other assets. Our balance consists of the following (in thousands):

	March 31, 2022			March 31, 2021
Furniture, fixtures and equipment	$	28,640		$	26,612
Leasehold improvements		7,615			6,918
Capitalized software		3,822			4,153
Vehicles		476			546
Total assets		40,553			38,229
Accumulated depreciation and amortization		(32,642	)		(30,841	)
Property and equipment - net	$	7,911		$	7,388

Depreciation and amortization expense on property and equipment, including amounts recognized in cost of sales, was $5.4 million for both the years ended March 31, 2022 and March 31, 2021, and $4.8 million for the year ended March 31, 2020.

F-23

8. NOTES PAYABLE AND CREDIT FACILITY

CREDIT FACILITY

We finance the operations of our subsidiaries ePlus Technology, inc., ePlus Technology Services, inc., and SLAIT Consulting, LLC (collectively, the “Borrowers”) in our technology segment through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility has a floor plan facility and a revolving credit facility.

Under the floor plan facility, we had an outstanding balance of $145.3 million and $98.7 million as of March 31, 2022, and March 31, 2021, respectively. On our balance sheet, our liability under the floor plan facility is presented as accounts payable – floor plan.

We did not have an outstanding balance under the revolving credit facility as of March 31, 2022, or March 31, 2021.

The fair value of the outstanding balances under the WFCDF credit facility were approximately equal to their carrying value as of March 31, 2022, and March 31, 2021.

On October 13, 2021, the Borrowers amended, restated, and replaced in entirety their then-existing credit agreements with WFCDF. The new credit facility is established by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floorplan facility in favor of the Borrowers in the aggregate principal amount of up to $375 million, an increase from $275 million, together with a sublimit for a revolving credit facility for up to $100 million (collectively, the “2021 Credit Facility”).

The amount of principal available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory, each pursuant to a formula and subject to certain reserves. Loans accrue interest at a rate per annum equal to LIBOR plus 1.75%. The LIBOR rate is based upon one-month, three-month, six-month and 12-month LIBOR periods, as selected by the Borrowers, and subject to a floor of 0.00%.

Our borrowings under the 2021 Credit Facility are secured by the assets of the Borrowers. Additionally, the 2021 Credit Facility requires a guaranty of $10.5 million by ePlus inc.

Under the 2021 Credit Facility, and under the predecessor WFCDF credit facility, the Borrowers are restricted in their ability to pay dividends to ePlus inc. unless their available borrowing meets or met certain thresholds. As of March 31, 2022, and March 31, 2021, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

The 2021 Credit Facility has an initial one-year term, which automatically renews for successive one-year terms thereafter. However, either the Borrowers or WFCDF may terminate by providing a written termination notice to the other party no less than 90 days prior to such termination.

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

The loss of the WFCDF credit facility 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 March 31, 2022, and 2021 we had $13.1 million and $18.1 million, respectively, in recourse borrowings arising from one installment payment arrangement within our technology segment. 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 due under this installment agreement to calculate our payable balance using an interest rate of 3.50% as of both March 31, 2022, and 2021.

F-24

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 March 31, 2022, and March 31, 2021, we had $21.2 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 periodically 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 March 31, 2022, and March 31, 2021, respectively.

Our recourse and non-recourse notes payable as of March 31, 2022 mature as follows:

	Recourse notes payable		Non-recourse notes payable
Year ended March 31, 2023	$	7,848	$	17,315
2024		6,207		2,696
2025		-		961
2026		-		584
Total maturities	$	14,055	$	21,556

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 or other legal dispute 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 our expectations, our financial condition and operating results for that period may 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 us in the future, and these matters could relate to prior, current, or future transactions or events.

10. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net earnings per share include the potential dilution of securities that could participate in our earnings, but not securities that are anti-dilutive.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed in our consolidated statements of operations for the fiscal years ended March 31, 2022, 2021 and 2020 (in thousands, except per share data):

	2022		2021		2020
Net earnings attributable to common shareholders - basic and diluted	$	105,600	$	74,397	$	69,082
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,638		26,674		26,654
Effect of dilutive shares		228		160		176
Weighted average shares common outstanding — diluted		26,866		26,834		26,830
Earnings per common share - basic	$	3.96	$	2.79	$	2.59
Earnings per common share - diluted	$	3.93	$	2.77	$	2.57

F-25

11. STOCKHOLDERS’ EQUITY

STOCK SPLIT AND TREASURY STOCK

On November 9, 2021, our Board of Directors (“Board”) approved a two-for-one stock split of our common stock in the form of a stock dividend paid on December 13, 2021, to shareholders of record as of close of business on November 29, 2021. All share and per share information have been retroactively adjusted to reflect the stock split and the incremental par value of the newly issued shares was recorded with the offset to additional paid-in capital.

On November 10, 2021, we retired 2,139,918 shares of treasury stock, adjusted for the stock split, with a carrying value of $82.2 million, which was deducted from common stock, for the par value of the retired shares, and from retained earnings, for the excess of cost over the par value.

SHARE REPURCHASE PLAN

On March 24, 2022, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2022. On March 18, 2021, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, adjusted for the stock split, over a 12-month period beginning May 28, 2021. On May 20, 2020, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, adjusted for the stock split, over a 12-month period beginning May 28, 2020.

These plans 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 year ended March 31, 2022, retroactively adjusted for the stock split, we purchased 227,990 shares of our outstanding common stock at an average cost of $48.48 per share for a total purchase price of $11.1 million under the share repurchase plan; we also acquired 55,430 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 year ended March 31, 2021, retroactively adjusted for the stock split, we purchased 118,202 shares of our outstanding common stock at an average cost of $35.92 per share for a total purchase price of $4.2 million under the share repurchase plan; we also acquired 75,280 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

In each of the years ended March 31, 2022, 2021 and 2020, we issued share-based payment awards and had outstanding share-based payment awards under the following plans: (1) the 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), and (2) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”). On September 16, 2021, our shareholders approved the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”). The 2021 Employee LTIP is effective October 1, 2021 and replaces the 2012 Employee LTIP. Beginning September 16, 2021, we permanently ceased issuing any additional shares under the 2012 Employee LTIP.

2012 Employee LTIP and 2021 Employee LTIP

On September 16, 2021, our stockholders approved the 2021 Employee LTIP that was adopted by the Board on July 21, 2021. Under the 2021 Employee LTIP, 3,000,000 shares, retroactively adjusted for the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

On September 13, 2012, our stockholders approved the 2012 Employee LTIP that was adopted by the Board on July 10, 2012. Under the 2012 Employee LTIP, 3,000,000 shares, retroactively adjusted to reflect the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

The purpose of these plans is to encourage our employees to acquire a proprietary interest in the growth and performance of ePlus, thus enhancing the value of ePlus for the benefit of its stockholders, and to enhance our ability to attract and retain exceptionally qualified individuals. These plans are administered by the Compensation Committee. Shares issuable under these plans may consist of authorized but unissued shares or shares held in our treasury. Under these plans, the Compensation Committee will determine the time and method of exercise or vesting of the awards. Shares under these plans will not be used to compensate our outside directors, who may be compensated under the separate 2017 Director LTIP, as discussed below.

F-26

2017 Director LTIP

On September 12, 2017, our stockholders approved the 2017 Director LTIP that was adopted by the Board on July 24, 2017. Under the 2017 Director LTIP, 300,000 shares, retroactively adjusted for the stock split, were authorized for grant to non-employee directors. The purpose of the 2017 Director LTIP is to align the economic interests of the directors with the interests of stockholders by including equity as a component of pay and to attract, motivate and retain experienced and knowledgeable directors. Each director receives an annual grant of restricted stock having a grant-date fair value equal to the cash compensation earned by an outside director during our fiscal year ended immediately before the respective annual grant-date. These restricted shares are prohibited from being sold, transferred, assigned, pledged, or otherwise encumbered or disposed of. The shares vest half on the one-year anniversary and half on the second-year anniversary from the date of the grant. In addition, each director may also elect to receive stock in lieu of their cash compensation. Stock received in lieu of cash vests immediately.

STOCK OPTION ACTIVITY

During the years ended March 31, 2022, 2021, and 2020, we did not grant any stock options, nor did we have any outstanding stock options.

RESTRICTED STOCK ACTIVITY

During the year ended March 31, 2022, we granted 14,316 restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 155,722 restricted shares, adjusted for the stock split, under the 2012 Employee LTIP, and no shares were granted under the 2021 Employee LTIP.

Cumulatively, as of March 31, 2022, we granted a total of 81,476 restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 2,144,578 restricted shares, adjusted for the stock split, under the 2012 Employee LTIP.

A summary of the non-vested restricted shares for year ended March 31, 2022, reflecting the stock split, is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2021		366,756		$	37.49
Granted		170,038		$	46.56
Vested		(185,716	)	$	39.19
Forfeited		(7,272	)	$	34.07
Nonvested March 31, 2022		343,806		$	41.01

In each of the years ended March 31, 2022, 2021 and 2020, we used the closing stock price on the grant date or, if the grant date falls on a date the stock was not traded, the previous day’s closing stock price for the fair value of the award.

The weighted-average grant date fair value of restricted shares granted during the years ended March 31, 2022, 2021, and 2020 was $46.56, $35.95, and $36.47, respectively.

The aggregated fair value of restricted shares that vested during the years ended March 31, 2022, 2021, and 2020 was $7.1 million, $7.7 million, and $7.6 million, respectively.

Upon each vesting period of the restricted stock awards to employees, participants are subject to minimum tax withholding obligations. The 2012 Employee LTIP, the 2021 Employee LTIP, and the 2017 Director LTIP allows us to withhold a sufficient number of shares due to the participant to satisfy their minimum tax withholding obligations. For the year ended March 31, 2022, we withheld 55,430 shares of common stock, adjusted for the stock split, at a value of $2.6 million, which was included in treasury stock. For the year ended March 31, 2021, we withheld 75,280 shares of common stock, adjusted for the stock split, at a value of $2.7 million, which was included in treasury stock.

COMPENSATION EXPENSE

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We account for forfeitures when they occur. There are no additional conditions for vesting other than service conditions.

F-27

During the years ended March 31, 2022, 2021 and 2020, we recognized $7.1 million, $7.2 million, and $8.0 million, respectively, of total share-based compensation expense. We recognized tax benefits related to share-based compensation of $2.0 million, $2.2 million, and $2.2 million for the years ended March 31, 2022, 2021, and 2020, respectively, which were included as a reduction to our provision for income taxes. As of March 31, 2022, the total unrecognized compensation expense related to non-vested restricted stock was $8.7 million, which is expected to be recognized over a weighted-average period of 27 months.

We also provide our employees with a contributory 401(k) profit sharing plan. We may make contributions, which are fully vested when they are made, to the plan. These contributions are not required. The decision whether to make contributions is entirely within our discretion. For the years ended March 31, 2022, 2021, and 2020, we recognized expense for employer contributions to the plan of $3.4 million, $3.0 million, and $2.8 million, respectively.

13. INCOME TAXES

We account for our tax positions in accordance with Codification Topic 740. 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 March 31, 2022, and March 31, 2021. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. Tax years 2019, 2020, and 2021 are subjected to examination by federal and state taxing authorities. Various state and local income tax returns are also under examination by taxing authorities. We do not believe that the outcome of any examination will have a material impact on our financial statements.

A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):

	Year Ended March 31,
	2022			2021			2020
Income tax expense computed at the U.S. statutory federal rate	$	30,845		$	22,450		$	20,182
State income tax expense—net of federal benefit		8,937			6,941			5,659
Non-deductible executive compensation		1,749			2,052			613
Other		(247	)		1,066			423
Provision for income taxes	$	41,284		$	32,509		$	26,877
Effective income tax rate		28.1	%		30.4	%		28.0	%

F-28

The components of the provision for income taxes are as follows (in thousands):

	Year Ended March 31,
	2022			2021			2020
Current:
Federal	$	32,309		$	26,054		$	19,367
State		11,681			9,882			9,520
Foreign		894			770			200
Total current expense		44,884			36,706			29,087
Deferred:
Federal		(3,289	)		(3,067	)		(492	)
State		(370	)		(1,096	)		(1,799	)
Foreign		59			(34	)		81
Total deferred benefit		(3,600	)		(4,197	)		(2,210	)
Provision for income taxes	$	41,284		$	32,509		$	26,877

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands):

	March 31,
	2022			2021
Deferred tax assets:
Accrued vacation	$	2,391		$	2,537
Deferred revenue		5,090			4,227
Allowance for credit losses		951			1,048
Restricted stock		616			772
Other deferred tax assets		743			1,552
Accrued bonus		2,532			2,277
Lease liabilities		1,857			2,476
Other credits and carryforwards		249			-
Gross deferred tax assets		14,429			14,889
Less: valuation allowance		(250	)		-
Net deferred tax assets		14,179			14,889
Deferred tax liabilities:
Property and equipment		(2,295	)		(2,391	)
Operating leases		(2,759	)		(6,948	)
Prepaid expenses		(887	)		(912	)
Right-of-use assets		(1,869	)		(2,419	)
Tax deductible goodwill		(1,319	)		(751	)
Total deferred tax  liabilities		(9,129	)		(13,421	)
Net deferred tax asset	$	5,050		$	1,468

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. As of March 31, 2022, we established a valuation allowance of $0.3 million, to offset gross deferred tax assets primarily attributable to cumulative net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards. We believe that it is more likely than not that we will realize the remaining gross deferred tax assets through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities.

F-29

14. FAIR VALUE MEASUREMENTS

We account for the fair values of our assets and liabilities utilizing a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value.

The following table provides the fair value of our assets and liabilities measured at fair value as categorized within the fair value hierarchy as of March 31, 2022, 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)
March 31, 2022
Assets:
Money market funds	$	18,138	$	18,138	$	-	$	-
March 31, 2021
Assets:
Money market funds	$	45,134	$	45,134	$	-	$	-

15. BUSINESS COMBINATIONS

SYSTEMS MANAGEMENT PLANNING (“SMP”)

On December 31, 2020, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of SMP, an established provider of technology solutions and services in upstate New York and the Northeast. The acquisition enhances ePlus’ footprint across the region, broadens our technology solution offerings especially in the areas of collaboration and supporting virtual employees, and adds to ePlus’ set of commercial, enterprise and state, local, and education customers.

Our sum of consideration transferred was $27.0 million consisting of $29.0 million paid in cash at closing less $2.0 million that was paid back to us in our quarter ended March 31, 2021 related to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	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.

F-30

16. SEGMENT REPORTING

Our segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chief operating decision-maker (“CODM”) for deciding how to allocate resources and for assessing performance. Our CODM is our Chief Executive Officer and President. Our CODM conducts our operations through two operating segments- our technology segment and our financing segment. Our technology segment includes sales of information technology products, third-party software, third-party maintenance, advanced professional and managed services and our proprietary software to commercial, state, and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software and related services to commercial, state, and local governments, and government contractors. Our CODM uses several measures to allocate resources and assess performance. Our reported measure is earnings before taxes.

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

	Year Ended March 31,
	2022							2021						2020
	Technology		Financing		Total			Technology		Financing		Total		Technology		Financing		Total
Net Sales
Product	$	1,492,411	$	87,983	$	1,580,394		$	1,305,789	$	60,369	$	1,366,158	$	1,337,022	$	58,266	$	1,395,288
Service		240,625		-		240,625			202,165		-		202,165		193,116		-		193,116
Total		1,733,036		87,983		1,821,019			1,507,954		60,369		1,568,323		1,530,138		58,266		1,588,404
Cost of Sales
Product		1,175,789		35,154		1,210,943			1,036,627		13,050		1,049,677		1,069,110		7,663		1,076,773
Service		149,094		-		149,094			125,092		-		125,092		120,440		-		120,440
Total		1,324,883		35,154		1,360,037			1,161,719		13,050		1,174,769		1,189,550		7,663		1,197,213
Gross Profit		408,153		52,829		460,982			346,235		47,319		393,554		340,588		50,603		391,191
Selling, general, and administrative		283,690		13,427		297,117			256,210		15,053		271,263		264,123		15,059		279,182
Depreciation and amortization		14,535		111		14,646			13,839		112		13,951		14,016		140		14,156
Interest and financing costs		928		975		1,903			521		1,484		2,005		294		2,280		2,574
Operating expenses		299,153		14,513		313,666			270,570		16,649		287,219		278,433		17,479		295,912
Operating income		109,000		38,316		147,316			75,665		30,670		106,335		62,155		33,124		95,279
Other income (expense)						(432	)						571						680
Earnings before tax					$	146,884						$	106,906					$	95,959
Net Sales
Contracts with customers	$	1,718,093	$	34,842	$	1,752,935		$	1,484,104	$	12,369	$	1,496,473	$	1,514,507	$	4,589	$	1,519,096
Financing and other		14,943		53,141		68,084			23,850		48,000		71,850		15,631		53,677		69,308
Total	$	1,733,036	$	87,983	$	1,821,019		$	1,507,954	$	60,369	$	1,568,323	$	1,530,138	$	58,266	$	1,588,404
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	15,592	$	8,713	$	24,305		$	14,568	$	5,423	$	19,991	$	14,516	$	4,640	$	19,156
Purchases of property, equipment and operating lease equipment	$	4,951	$	18,231	$	23,182		$	4,752	$	6,761	$	11,513	$	4,842	$	2,167	$	7,009
Selected Financial Data - Balance Sheet
Total assets	$	941,743	$	224,460	$	1,166,203		$	828,576	$	248,199	$	1,076,775	$	709,854	$	199,259	$	909,113

F-31

TECHNOLOGY SEGMENT DISAGGREGATION OF REVENUE

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized below (in thousands):

	Year Ended March 31,
	2022			2021			2020
Customer end market:
Telecom, Media & Entertainment	$	502,408		$	371,913		$	289,958
Technology		250,485			251,683			324,239
State and local government and educational institutions		241,769			245,919			243,092
Healthcare		270,481			200,067			233,894
Financial Services		155,160			198,761			191,679
All others		312,733			239,611			247,276
Net sales		1,733,036			1,507,954			1,530,138
Less: Revenue from financing and other		(14,943	)		(23,850	)		(15,631	)
Revenue from contracts with customers	$	1,718,093		$	1,484,104		$	1,514,507
	Year Ended March 31,
	2022			2021			2020
Vendor:
Cisco Systems	$	672,821		$	537,041		$	607,719
Dell EMC		148,782			107,336			84,939
Juniper Networks		92,965			91,946			68,339
HP Inc. & HPE		56,171			59,838			71,802
Arista Networks		44,280			51,789			75,281
NetApp		91,948			58,020			59,812
All others		626,069			601,984			562,246
Net sales		1,733,036			1,507,954			1,530,138
Less: Revenue from financing and other		(14,943	)		(23,850	)		(15,631	)
Revenue from contracts with customers	$	1,718,093		$	1,484,104		$	1,514,507

FINANCING SEGMENT DISAGGREGATION OF REVENUE

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

GEOGRAPHIC INFORMATION

The geographic information for the years ended March 31, 2022, 2021, and 2020 was as follows (in thousands):

	Year Ended March 31,
	2022		2021		2020
Net sales:
US	$	1,716,525	$	1,476,466	$	1,508,329
Non US		104,494		91,857		80,075
Total	$	1,821,019	$	1,568,323	$	1,588,404
	March 31,
	2022		2021
Long-lived tangible assets:
US	$	21,837	$	33,504
Non US		716		931
Total	$	22,553	$	34,435

Our long-lived tangible assets include property and equipment-net, operating leases-net, and equipment that has been returned to us at the termination of the lease.

Sales to Verizon Communications Inc. represented 24%, 19% and 15% of net sales for the years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively, all of which related to our technology segment.

F-32

ePlus inc. AND SUBSIDIARIES

Schedule II - Valuation and Qualifying Accounts

(Dollars in thousands)

	Balance at Beginning of Period		Charged to Costs and Expenses			Deductions/ Write-Offs			Balance at End of Period
Allowance for sales returns: (1)
Year ended March 31, 2020		852		2,678			(2,492	)		1,038
Year ended March 31, 2021		1,038		2,909			(2,758	)		1,189
Year ended March 31, 2022		1,189		2,158			(2,101	)		1,246
Allowance for credit losses:
Year ended March 31, 2020		2,614		1,004			(429	)		3,189
Year ended March 31, 2021		3,189		1,436			(178	)		4,447
Year ended March 31, 2022		4,447		(102	)		(545	)		3,800
Valuation for deferred taxes:
Year ended March 31, 2020		1,065		320			-			1,385
Year ended March 31, 2021		1,385		-			(1,385	)		-
Year ended March 31, 2022		-		250			-			250

(1) These amounts represent the gross profit effect of sales returns during the respective years. Expected merchandise returns after year-end for sales made before year-end were $7.8 million, $7.4 million, and $6.5 million as of March 31, 2022, 2021, and 2020, respectively.

EX-3.2

Exhibit 3.2

EPLUS INC.

A DELAWARE CORPORATION AMENDED AND RESTATED BYLAWS

(Amended and restated on March 2, 2022)

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 more than 120 days nor later than 90 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.

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 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,

(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 therefore;

(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-4.2

Exhibit 4.2

DESCRIPTION OF EPLUS INC.’S CAPITAL STOCK

As of March 31, 2022, ePlus inc. (the “Company” or “ePlus”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock par value $0.01 per share. Our common stock is listed on the NASDAQ Global Select Market. The following summary of the terms of our common stock is based on our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws. These summaries do not purport to be complete and are subject to and qualified by reference to the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and by the provisions of applicable Delaware law.

General

The Company has an authorized capitalization of 52,000,000 shares of capital stock, consisting of 50,000,000 shares of common stock, par value $0.01 per share, and 2,000,000 shares of undesignated preferred stock, par value $0.01 per share.

Common Stock

Subject to the prior or special rights of holders of shares of preferred stock:

Dividends. The holders of shares of common stock are entitled to any dividends that may be declared by our board of directors out of legally available funds;

Liquidation, Dissolution or Winding Up. In the event of a liquidation, dissolution or winding up of the Company, the holders of shares of common stock are entitled upon liquidation to share ratably in all assets remaining after payment of liabilities and the satisfaction of the liquidation preferences of any outstanding shares of preferred stock;

Redemption. The holders of shares of common stock are not subject to, or entitled to the benefits of, any redemption or sinking fund provision;

Conversion. No holder of common stock has the right to convert or exchange any such shares with or into any other shares of capital stock of the Company;

Preemptive Rights. No holder of common stock has preemptive rights; and

Voting. Each share of common stock entitles the holder thereof to one vote, in person or by proxy, on all matters submitted to a vote of stockholders generally. Voting is non-cumulative. Except as specifically provided in the Delaware General Corporation Law (the “DGCL”) or in the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, the affirmative vote required for stockholder action shall be that of a majority of the shares present in person or represented by proxy at the meeting (as counted for purposes of determining the existence of a quorum at the meeting). Directors are elected by a plurality of the votes cast in the election. However, the Company’s Corporate Governance Guidelines provide that, in an uncontested election (that is, an election where the number of director nominees does not exceed the number of directors to be elected), if any nominee for director does not receive a majority of the votes cast, he or she is expected to tender his or her resignation in writing to the Chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee shall evaluate the resignation tendered and shall make a recommendation to the Board whether to accept or reject the resignation, or whether other actions should be taken. The board of directors shall act on each such resignation, taking into account the recommendation of the Nominating and Corporate Governance Committee, within 90 days following the certification of the election results. If a director’s resignation is not accepted by the board of directors, then the director who tendered that resignation will continue to serve on the board of directors until the next annual meeting of shareholders and until his or her successor is elected and qualified, or until his or her earlier death, unconditional resignation, or removal. In the event of a contested election, director nominees who receive the most votes for the number of seats up for election will be elected.

Certain Anti-Takeover Effects of Certain Provisions of the Company’s Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the Delaware General Corporation Law

The provisions of Delaware law and the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may have the effect of delaying, deferring or discouraging another party from acquiring control of the Company in a coercive manner as described below. These provisions, summarized below, are expected to discourage and prevent coercive takeover practices and inadequate takeover bids. These provisions are designed to encourage persons seeking to acquire control of the Company to first negotiate with the board of directors. They are also intended to provide management with the flexibility to enhance the likelihood of continuity and stability if the board of directors determines that a takeover is not in the Company’s best interests or the best interests of the stockholders. These provisions, however, could have the effect of discouraging attempts to acquire the Company, which could deprive stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices. The Company believes that the benefits of these provisions, including increased protection of the Company’s potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure the Company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.

Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of the Company. The Company is a Delaware corporation subject to Section 203 of the Delaware General Corporation Law. Under Section 203, certain “business combinations” between a Delaware corporation and an “interested stockholder” are prohibited for a three-year period following the date that such stockholder became an interested stockholder, unless:

• the business combination or the transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors of the corporation before such stockholder became an interested stockholder;

• upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (a) by directors who are also officers and (b) by employee stock plans in which the employees do not have a confidential right to tender stock held by the plan in a tender or exchange offer; or

• after such stockholder becomes an interested stockholder, the business combination is approved by the board of directors of the corporation and authorized at a meeting, and not by written consent, by two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

The three-year prohibition also does not apply to some business combinations proposed by an interested stockholder following the announcement or notification of an extraordinary transaction involving the corporation and a person who had not been an interested stockholder during the previous three years or who became an interested stockholder with the approval of a majority of the corporation’s directors.

Under the Delaware General Corporation Law, the term “business combination” is defined generally to include mergers or consolidations between the corporation or its majority-owned subsidiary and an interested stockholder, transactions with an interested stockholder involving the assets of the corporation or its majority-owned subsidiaries, and transactions that increase an interested stockholder’s percentage ownership of stock. The term “interested stockholder” is defined generally as those stockholders who become beneficial owners of 15% or more of the corporation’s voting stock, together with the affiliates or associates of that stockholder.

The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide for

• Election of Directors and Vacancies. The Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws contain provisions that establish specific procedures for appointing and removing members of the board of directors. Vacancies and newly created directorships on our board of directors may be filled only by a majority of the directors then serving on the board.

• Requirements for Advance Notification of Stockholder Nominations and Proposals. The Amended and Restated Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors.

• Undesignated Preferred Stock. The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us.

• No Cumulative Voting. The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws do not provide for cumulative voting in the election of directors. Cumulative voting allows a minority stockholder to vote a portion or all of its shares for one or more candidates for seats on the board of directors. Without cumulative voting, a minority stockholder will not be able to gain as many seats on the board of directors based on the number of shares of stock the stockholder holds as the stockholder would be able to gain if cumulative voting were permitted. The absence of cumulative voting makes it more difficult for a minority stockholder to gain a seat on the board of directors to influence the board of director’s decision regarding a takeover.

The provisions described above are intended to promote continuity and stability in the composition of the board of directors and in the policies formulated by the board, and to discourage some types of transactions that may involve an actual or threatened change of control. The Company expects these provisions would reduce vulnerability to unsolicited acquisition attempts as well as discourage some tactics that may be used in proxy fights. Such provisions, however, could discourage others from making tender offers for the Company’s shares and, as a consequence, may also inhibit increases in the market price of the Company’s common stock that could result from actual or rumored takeover attempts. These provisions could also operate to prevent changes in management.

EX-21

Exhibit 21

Subsidiaries of ePlus inc.

Technology

ePlus Technology, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus inc.

ePlus Software, LLC, a Commonwealth of Virginia limited liability corporation, a wholly-owned subsidiary of ePlus Technology, inc.

ePlus Technology Netherlands B.V., a Netherlands private company with limited liability, a wholly-owned subsidiary of ePlus Technology, inc.

ePlus Cloud Services, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus Technology, inc.

SLAIT Consulting, LLC, a Commonwealth of Virginia limited liability corporation, a wholly-owned subsidiary of ePlus Technology, inc.

IGXGlobal UK, Limited, an England and Wales Private limited Company, a wholly-owned subsidiary of ePlus Technology, inc.

Onecloud Consulting Inc, a California corporation, a wholly-owned subsidiary of ePlus Technology, inc.

CloudUno Consulting India Private Limited, an Indian private limited company, a wholly-owned subsidiary of Onecloud Consulting Inc.

Cloud Uno Pte. Ltd., a Singapore private limited company, a wholly-owned subsidiary of Onecloud Consulting Inc.

ePlus EMEA, inc. Ltd., an Israel limited company, a wholly-owned subsidiary of ePlus Technology, inc.

ePlus Technology Canada, inc., registered in Canada, wholly owned by ePlus Technology, inc.

ePlus Technology Services, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus Technology, inc.

Financing

ePlus Group, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus inc.

ePlus Financing Netherlands B.V., a Netherlands private company with limited liability, a wholly-owned subsidiary of ePlus Group, inc.

IGX Capital UK, Ltd., an England and Wales Private limited Company, a wholly-owned subsidiary of ePlus Group, inc.

ePlus Iceland, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus Group, inc.

ePlus Government, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus inc.

ePlus Capital, inc., a Commonwealth of Virginia corporation, a wholly-owned subsidiary of ePlus inc.

ePlus Canada Company, registered in Canada, wholly owned by ePlus Capital, inc.

EX-23

Exhibit 23

 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-220601 and 333-261441 on Forms S-8 of our reports dated May 25, 2022, relating to the consolidated financial statements and financial statement schedule of ePlus inc. and subsidiaries, and the effectiveness of ePlus inc. and subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K of ePlus inc. for the year ended March 31, 2022.

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia

May 25, 2022

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Mark P. Marron, certify that:

1. I have reviewed this annual report on Form 10-K 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: May 25, 2022

/s/ MARK P. MARRON

Mark P. Marron

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elaine D. Marion, certify that:

1. I have reviewed this annual report on Form 10-K 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: May 25, 2022

/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 Annual Report of ePlus inc. on Form 10-K for the year ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s best knowledge and belief:

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

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

Date: May 25, 2022

/s/ MARK P. MARRON

Mark P. Marron Chief Executive Officer

(Principal Executive Officer)

/s/ ELAINE D. MARION

Elaine D. Marion Chief Financial Officer

(Principal Financial Officer)

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

XML

Document and Entity Information - USD ($)	12 Months Ended
	Mar. 31, 2022	May 23, 2022	Sep. 30, 2021
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Amendment Flag	false
Document Period End Date	Mar. 31, 2022
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
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 Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Public Float			$ 1,355,245,489
Entity Common Stock, Shares Outstanding		26,818,561
ICFR Auditor Attestation Flag	true
Auditor Name	DELOITTE & TOUCHE LLP
Auditor Location	McLean, Virginia
Auditor Firm ID	34

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Current assets:
Cash and cash equivalents	$ 155,378	$ 129,562
Accounts receivable-trade, net	430,380	391,567
Accounts receivable-other, net	48,673	41,053
Inventories	155,060	69,963
Financing receivables-net, current	61,492	106,272
Deferred costs	32,555	28,201
Other current assets	13,944	10,976
Total current assets	897,482	777,594
Financing receivables and operating leases-net	64,292	90,165
Deferred tax asset-net	5,050	1,468
Property, equipment, and other assets	45,586	42,289
Goodwill	126,543	126,645
Other intangible assets-net	27,250	38,614
TOTAL ASSETS	1,166,203	1,076,775
Current liabilities:
Accounts payable	136,161	165,162
Accounts payable-floor plan	145,323	98,653
Salaries and commissions payable	39,602	36,839
Deferred revenue	86,469	72,802
Other current liabilities	28,095	30,061
Total current liabilities	460,036	459,364
Other liabilities	35,529	36,679
TOTAL LIABILITIES	505,465	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; 50,000 shares authorized; 26,886 outstanding at March 31, 2022 and 27,006 outstanding at March 31, 2021	270	145
Additional paid-in capital	159,480	152,366
Treasury stock, at cost, 130 shares at March 31, 2022 and 1,987 shares at March 31, 2021	(6,734)	(75,372)
Retained earnings	507,846	484,616
Accumulated other comprehensive income-foreign currency translation adjustment	(124)	655
Total Stockholders' Equity	660,738	562,410
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,166,203	1,076,775
Recourse [Member]
Current liabilities:
Notes payable-current	7,316	5,450
Notes payable - long-term	5,792	12,658
Non-recourse [Member]
Current liabilities:
Notes payable-current	17,070	50,397
Notes payable - long-term	$ 4,108	$ 5,664

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2022	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)	50,000	50,000
Common stock, shares outstanding (in shares)	26,886	27,006
Treasury stock, shares (in shares)	130	1,987

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Net sales
Total	$ 1,821,019	$ 1,568,323	$ 1,588,404
Cost of sales
Total	1,360,037	1,174,769	1,197,213
Gross profit	460,982	393,554	391,191
Selling, general, and administrative	297,117	271,263	279,182
Depreciation and amortization	14,646	13,951	14,156
Interest and financing costs	1,903	2,005	2,574
Operating expenses	313,666	287,219	295,912
Operating income	147,316	106,335	95,279
Other income (expense)	(432)	571	680
Earnings before tax	146,884	106,906	95,959
Provision for income taxes	41,284	32,509	26,877
Net earnings	$ 105,600	$ 74,397	$ 69,082
Net earnings per common share-basic (in dollars per share)	$ 3.96	$ 2.79	$ 2.59
Net earnings per common share-diluted (in dollars per share)	$ 3.93	$ 2.77	$ 2.57
Weighted average common shares outstanding-basic (in shares)	26,638	26,674	26,654
Weighted average common shares outstanding-diluted (in shares)	26,866	26,834	26,830
Product [Member]
Net sales
Total	$ 1,580,394	$ 1,366,158	$ 1,395,288
Cost of sales
Total	1,210,943	1,049,677	1,076,773
Services [Member]
Net sales
Total	240,625	202,165	193,116
Cost of sales
Total	$ 149,094	$ 125,092	$ 120,440

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
NET EARNINGS	$ 105,600	$ 74,397	$ 69,082
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Foreign currency translation adjustments	(779)	1,646	(720)
Other comprehensive income (loss)	(779)	1,646	(720)
TOTAL COMPREHENSIVE INCOME	$ 104,821	$ 76,043	$ 68,362

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net earnings	$ 105,600	$ 74,397	$ 69,082
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	24,305	19,991	19,156
Provision for credit losses	(102)	1,436	1,004
Share-based compensation expense	7,114	7,169	7,954
Deferred taxes	(3,581)	(4,198)	(2,185)
Payments from lessees directly to lenders-operating leases	(32)	(34)	(70)
Gain on disposal of property, equipment, and operating lease equipment	(4,136)	(2,742)	(814)
Changes in:
Accounts receivable	(50,803)	(5,056)	(64,388)
Inventories-net	(85,453)	(16,798)	115
Financing receivables-net	8,832	(42,104)	(109,355)
Deferred costs and other assets	(10,560)	(16,503)	(20,982)
Accounts payable-trade	(25,187)	76,772	(8,884)
Salaries and commissions payable, deferred revenue, and other liabilities	13,432	37,177	35,193
Net cash provided by (used in) operating activities	(20,571)	129,507	(74,174)
Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment	21,923	2,791	1,705
Purchases of property, equipment and operating lease equipment	(23,182)	(11,513)	(7,009)
Cash used in acquisitions, net of cash acquired	0	(27,034)	(15,035)
Net cash used in investing activities	(1,259)	(35,756)	(20,339)
Cash flows from financing activities:
Borrowings of non-recourse and recourse notes payable	114,105	66,403	141,369
Repayments of non-recourse and recourse notes payable	(99,991)	(74,328)	(31,880)
Repurchase of common stock	(13,608)	(6,948)	(14,425)
Repayments of financing of acquisitions	0	(556)	(5,763)
Net borrowings (repayments) on floor plan facility	46,670	(34,373)	11,333
Net cash provided by (used in) financing activities	47,176	(49,802)	100,634
Effect of exchange rate changes on cash	470	(618)	294
Net increase in cash and cash equivalents	25,816	43,331	6,415
Cash and cash equivalents, beginning of period	129,562	86,231	79,816
Cash and cash equivalents, end of period	155,378	129,562	86,231
Supplemental disclosures of cash flow information:
Cash paid for interest	1,714	1,436	2,260
Cash paid for income taxes	47,143	31,690	28,356
Cash paid for amounts included in the measurement of lease liabilities	4,653	5,780	5,613
Schedule of non-cash investing and financing activities:
Proceeds from sale of property, equipment, and leased equipment	18	2,045	0
Purchases of property, equipment, and operating lease equipment	(98)	(372)	(329)
Consideration for acquisitions	0	0	(241)
Borrowing of non-recourse and recourse notes payable	58,619	121,826	114,439
Repayments of non-recourse and recourse notes payable	(32)	(34)	(70)
Vesting of share-based compensation	8,481	7,937	8,990
New operating lease assets obtained in exchange for lease obligations	$ 2,653	$ 1,146	$ 6,035

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Mar. 31, 2019	$ 143	$ 137,243	$ (53,999)	$ 341,137	$ (271)	$ 424,253
Balance (in shares) at Mar. 31, 2019	27,222
Issuance of restricted stock awards	$ 1	0	0	0	0	1
Issuance of restricted stock awards (in shares)	186
Share-based compensation	$ 0	7,954	0	0	0	7,954
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (14,425)	0	0	(14,425)
Repurchase of common stock (in shares)			(408)
Net earnings	0	0	$ 0	69,082	0	69,082
Foreign currency translation adjustment	0	0	0	0	(720)	(720)
Balance at Mar. 31, 2020	$ 144	145,197	(68,424)	410,219	(991)	486,145
Balance (in shares) at Mar. 31, 2020	27,000
Issuance of restricted stock awards	$ 1	0	0	0	0	1
Issuance of restricted stock awards (in shares)	200
Share-based compensation	$ 0	7,169	0	0	0	7,169
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (6,948)	0	0	(6,948)
Repurchase of common stock (in shares)			(194)
Net earnings	0	0	$ 0	74,397	0	74,397
Foreign currency translation adjustment	0	0	0	0	1,646	1,646
Balance at Mar. 31, 2021	$ 145	152,366	(75,372)	484,616	655	$ 562,410
Balance (in shares) at Mar. 31, 2021	27,006					27,006
Issuance of restricted stock awards	$ 1	0	0	0	0	$ 1
Issuance of restricted stock awards (in shares)	163
Share-based compensation	$ 0	7,114	0	0	0	7,114
Share-based compensation (in shares)	0
Repurchase of common stock	$ 0	0	$ (13,608)	0	0	(13,608)
Repurchase of common stock (in shares)			(283)
Stock split effected in the form of a dividend	135	0	$ 0	(135)	0	0
Retirement of treasury stock	(11)	0	82,246	(82,235)	0	0
Net earnings	0	0	0	105,600	0	105,600
Foreign currency translation adjustment	0	0	0	0	(779)	(779)
Balance at Mar. 31, 2022	$ 270	$ 159,480	$ (6,734)	$ 507,846	$ (124)	$ 660,738
Balance (in shares) at Mar. 31, 2022	26,886					26,886

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2022

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 Annual Report on Form 10-K as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional, and managed services and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises in the United States (“US”) and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, Singapore, and Israel.

BASIS OF PRESENTATION — The 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 acquired businesses are included in the consolidated financial statements from the dates of acquisition.

USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual asset values, vendor consideration, lease classification, goodwill and intangibles, 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.

STOCK SPLIT — On December 13, 2021, we completed a two-for-one stock split in the form of a stock dividend. References made to outstanding shares or per share amounts in the accompanying financial statements and disclosures have been retroactively adjusted for this stock split.

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We write off financing receivables when we deem them to be uncollectable. Since the onset of the COVID-19 pandemic, we have measured our allowance using higher than historical loss rates to reflect forecasted credit deterioration.

BUSINESS COMBINATIONS — We account for business combinations using the acquisition method, which requires that the total purchase price for each of the acquired entity be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The allocation process requires an analysis of intangible assets, such as customer relationships, trade names, acquired contractual rights and assumed contractual commitments and legal contingencies to identify and record all assets acquired and liabilities assumed at their fair value.

We record any premium paid over the fair value of the acquired net assets as goodwill. Our initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. We include the results of operations for the acquired company in our financial statements from the acquisition date.

CASH AND CASH EQUIVALENTS — Cash and cash equivalents consist primarily of interest-bearing accounts and money market funds that consist of short-term US treasury securities. We consider all highly liquid investments, including those with an original maturity of three months or less at the date of acquisition, to be cash equivalents. We have a lockbox account whose purpose is to collect and distribute customer payments under financing arrangements. As of March 31, 2022, we were not holding any amounts in trust for third-party recipients. As of March 31, 2021, we had $0.7 million being held in trust for third-party recipients within our lockbox account. As of March 31, 2022, and March 31, 2021, there were no restrictions on the withdrawal of funds from our money market funds.

CONCENTRATIONS OF RISK — Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, and financing receivables. Cash and cash equivalents may include short-term investments that are maintained principally with financial institutions in the US. Our accounts receivable-trade balance as of March 31, 2022, and 2021 included approximately 14% and 20%, respectively, concentration of invoices due from Verizon Communications Inc. The risk on our accounts receivable and financing receivables is reduced by having a broad customer base in a diverse range of industries and through the ongoing evaluation of collectability of our portfolio. The credit risk is further mitigated by transferring certain of our financing receivables to financial institutions on a non-recourse basis and, for our lease receivables, by owning the underlying asset. A substantial portion of our sales are products from Cisco Systems, which represented approximately 39%, 36%, and 40%, of our technology segment net sales for the years ended March 31, 2022, 2021, and 2020, respectively.

DEFERRED COSTS — When a contract is within the scope of Accounting Standards Codification (“Codification”) Topic 606, Revenue from Contracts with Customers (“Codification Topic 606”), we defer costs of fulfilling the contract when they generate or enhance resources that will be used by us in satisfying performance obligations in the future. Additionally, we capitalize costs that are incremental to obtaining the contracts, predominately sales commissions, and expense them in proportion to each completed contract performance obligation.

DEFERRED REVENUE — We recognize deferred revenue when cash payments are received or due in advance of our performance.

EARNINGS PER SHARE — Basic earnings per share is calculated by dividing net earnings attributable to common stockholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share reflects the potential dilution of securities that could participate in our earnings, including restricted stock awards during each period.

FAIR VALUE MEASUREMENT — We follow the guidance in Codification Topic 820 Fair Value Measurements (“Codification Topic 820”) which governs how to measure fair value for financial reporting. This topic defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. This topic also establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value:

● Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

● Level 2 – Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in active markets, that are observable for the asset or liability, either directly or indirectly.

● Level 3 – Unobservable inputs for the asset or liability. The fair values are determined based on model-based techniques such as discounted cash flow models using inputs that we could not corroborate with market data.

FINANCIAL INSTRUMENTS — For financial instruments such as cash, short-term investments, accounts receivables, accounts payable and other current liabilities, we consider the recorded value of the financial instruments to approximate the fair value due to their short maturities. On March 31, 2022, the carrying amounts of our notes receivables, recourse and non-recourse payables were $80.5 million, $13.1 million, and $21.2 million, respectively, and their fair values were $80.0 million, $13.1 million, and $21.2 million, respectively. On March 31, 2021, the carrying amounts of our notes receivables, recourse and non-recourse payables were $112.6 million, $18.1 million, and $56.1 million, respectively, and their fair values were $113.2 million, $18.1 million, and $56.3 million, respectively.

FINANCING RECEIVABLES AND OPERATING LEASES — Financing receivables and operating leases consists of notes receivable, sales-type leases, and operating leases. We issue financing receivables for periods generally between 2 to 6 years, with most terms ranging between 3 to 4 years. When we lease equipment under an operating lease, we recognize the underlying asset at cost and depreciate it on a straight-line bases over its estimated useful life. We estimate that the useful life for most information technology (“IT”) equipment under lease is 4 years.

FOREIGN CURRENCY MATTERS — Our functional currency is the US dollar. Our international subsidiaries typically use their local currency as their functional currency. We translate the assets and liabilities of our international subsidiaries into US dollars at the spot rate in effect at the applicable reporting date. We translate the revenues and expenses of our international subsidiaries into US dollars at the average exchange rates in effect during the applicable period. We report the resulting foreign currency translation adjustment as accumulated other comprehensive income (loss), which is reflected as a separate component of stockholders’ equity. We report all foreign currency transaction gains or losses in other income (expense) on our consolidated statement of operations. For the years ended March 31, 2022, 2021, and 2020, we recognized a loss of $0.5 million, a gain of $0.5 million, and a loss of $0.4 million, respectively, due to foreign currency transactions.

GOODWILL — We test goodwill for impairment on an annual basis, as of October 1, 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 amount.

In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test. We may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.

In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

IMPLEMENTATION COSTS OF A HOSTING ARRANGEMENT- We capitalize implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We classify these capitalized costs in the same balance sheet line item as the amounts prepaid for the related hosting arrangement and we present the amortization of these capitalized costs in the same income statement line item as the service fees for the related hosting arrangement. Our long-term prepaids are included in our consolidated balance sheets as part of property, equipment, and other assets. We amortize the capitalized implementation costs over the term of the hosting arrangement.

INCOME TAXES — Deferred income taxes are accounted for in accordance with Codification Topic 740 Income Taxes (“Codification Topic 740”). Under this method, deferred income tax assets and liabilities are determined based on the temporary differences between the financial statement reporting and tax bases of assets and liabilities, using tax rates currently in effect. Future tax benefits, such as net operating loss carry-forwards, are recognized to the extent that realization of these benefits is considered to be more likely than not. We review our deferred tax assets at least annually and make necessary valuation adjustments.

In addition, we account for uncertain tax positions in accordance with Codification Topic 740. Specifically, the Topic prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related de-recognition, classification, interest and penalties, accounting for interim periods, disclosure, and transition of uncertain tax positions. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense.

INVENTORIES — Inventories are stated at the lower of cost and net realizable value. Cost is determined using a weighted average cost method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Our determination of the net realizable value for inventories is based on the terms of underlying purchase commitments from our customers, current economic conditions including the impact of COVID-19, and other relevant factors.

LESSEE ACCOUNTING — We lease office space for periods up to 6 years. At the lease commencement date, we recognize operating lease liabilities based on the present value of the future minimum lease payments. In determining the present value of future minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date. When the future minimum payments encompass non-lease components, we account for the lease and non-lease components as a single lease component. We elected not to recognize right-of-use assets and lease liabilities for leases with an initial term of 12 months or less. We recognize lease expense on a straight-line basis over the lease term beginning on the commencement date.

PROPERTY AND EQUIPMENT — Property and equipment are stated at cost, net of accumulated depreciation and amortization. We recognize property and equipment obtained through a business combination at its fair market value as of the acquisition date. We compute depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. We typically depreciate internal use IT equipment over three years, perpetual software licenses over five years, furniture and fixtures over five years, and telecommunications equipment over seven years.

RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term. In a sales-type lease, we recognize the unguaranteed residual asset, measured on a discounted basis, upon lease commencement. In our subsequent accounting for the lease, we increase the unguaranteed residual asset using the effective interest method. We evaluate residual values for impairment on a quarterly basis. We recognize impairments as incurred. We do not recognize upward adjustments due to changes in estimates of residual values.

REVENUE RECOGNITION — We recognize most of our revenues from the sales of third-party products, third-party software, third-party maintenance, software support, and services, ePlus professional and managed services, and hosting ePlus proprietary software. We recognize revenue from these sales under the guidance in Codification Topic 606.

The core principle of Codification Topic 606 is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. We account for a contract under Codification Topic 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance, and collectability of consideration is probable.

Revenues are reported net of sales refunds, including an estimate of future returns based on an evaluation of historical sales returns, current economic conditions, volume, and other relevant factors.

Our contracts with customers may include multiple promises that are distinct performance obligations. For such arrangements, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin.

We recognize revenue when (or as) we satisfy a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. Depending on the nature of each performance obligation, this may be at a point in time or over time, as further described below.

We typically invoice our customers for third-party products upon shipment, unless our customers lease the equipment through our financing segment, in which case the arrangement is accounted for as a lease in accordance with Codification Topic 842, Leases (“Codification Topic 842”). We typically invoice our customers for third-party software upon delivery and third-party services at the point of sale, unless our customers finance these products through our financing segment, in which case we record a financing receivable based on the terms of the arrangement. 

Product revenue

Sales of third-party products

We are the principal in sales of third-party products. As such, we recognize sales on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer.

In some instances, our customers may request that we bill them for a product but retain physical possession of the product until later delivery, commonly known as “bill-and-hold” arrangements. We have warehousing agreements with select customers wherein title to products ordered through the agreements transfers to our customer at the point we invoice the customer and after the product arrives at our warehouse. In these “bill-and-hold” arrangements, we recognize revenue when the customer has ordered the product through their warehousing agreement with us or signed a bill-and-hold agreement with us, the product is identified separately as belonging to the customer, and the product is ready for delivery to the customer.

We recognize sales of off-lease equipment within our financing segment when control passes to the customer, which is typically the date that title to the equipment is transferred per the sales agreement.

Sales of third-party software

We are typically the principal in sales of third-party software. Sales are recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the software to the customer.

Sales of third-party maintenance, software support, and services

We are the agent in sales of third-party maintenance, software support, and services as the third-party controls the service until it is transferred to the customer. Similarly, we are the agent in sales of third-party software and accompanying third-party support when the third-party software benefits the customer only in conjunction with the accompanying support. In these sales, we consider the third-party software and support as inputs to a single performance obligation. In all these sales where we are the agent, we recognize sales on a net basis at the point that our customer and vendor accept the terms and conditions of the arrangement.

Freight and sales tax

We present freight billed to our customers within sales and the related freight charged to us within cost of sales. We present sales tax collected from customers and remittances to governmental authorities on a net basis.

Financing revenue and other

We account for leases to customers in accordance with Codification Topic 842. We utilize a portfolio approach by grouping together many similar assets being leased to a single customer.

We classify our leases as either sales-type leases or operating leases. We classify leases as sales-type leases if any one of five criteria are met, each of which indicate that the lease transfers control of the underlying asset to the lessee. We classify our other leases as operating leases.

For sales-type leases, upon lease commencement, we recognize the present value of the lease payments and the residual asset discounted using the rate implicit in the lease. When we are financing equipment provided by another dealer, we typically do not have any selling profit or loss arising from the lease. When we are the dealer of the equipment being leased, we typically recognize revenue in the amount of the lease receivable and cost of sales in the amount of the carrying value of the underlying asset minus the unguaranteed residual asset. After the commencement date, we recognize interest income as part of net sales using the effective interest method.

For operating leases, we recognize the underlying asset as an operating lease asset. We depreciate the asset on a straight-line basis to its estimated residual value over its estimated useful life. We recognize the lease payments over the lease term on a straight-line basis as part of net sales.

In all our leases, we recognize variable lease payments, primarily reimbursement for property taxes associated with the leased asset, as part of net sales in the period in which the changes in facts and circumstances on which the variable lease payments are based occur. We exclude from revenues and expenses any sales taxes reimbursed by the lessee.

We also finance third-party software and third-party services for our customers, which we classify as notes-receivable. We recognize interest income on our notes-receivable using the effective interest method.

We account for transfers of our financial assets, under Codification Topic 860 Transfers and Servicing (“Codification Topic 860”). When a transfer meets all the requirements for sale accounting, we derecognize the financial asset and record a net gain or loss that is included in net sales.

Service revenue

Sales of ePlus professional, managed services, and staffing

ePlus professional services offerings include assessments, project management, and staging, configuration, and integration. ePlus managed service offerings range from monitoring and notification to a fully outsourced network management or service desk solution. ePlus staffing delivers a full range of staffing solutions, including short-term, long-term, temporary-to-hire, and direct-hire IT professionals. In all these arrangements, we satisfy our performance obligation and recognize revenue over time.

In arrangements for ePlus professional services and staffing, we provide services under both time and materials and fixed price contracts. When services are provided on a time and materials basis, we recognize sales at agreed-upon billing rates as services are performed. When services are provided on a fixed fee basis, we recognize sales over time in proportion to our progress toward complete satisfaction of the performance obligation. We typically measure progress based on costs incurred in proportion to total estimated costs, commonly referred to as the “cost-to-cost” method.

In arrangements for ePlus managed services, our arrangement is typically a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). We typically recognize sales from these services on a straight-line basis over the period services are provided.

SHARE-BASED COMPENSATION — We account for share-based compensation in accordance with Codification Topic 718 Compensation—Stock Compensation. We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We account for forfeitures when they occur. There are no additional conditions for vesting other than service conditions.

SOFTWARE DEVELOPMENT COSTS — We capitalize costs for the development of internal use software under the Codification Topic 350-40 Intangibles—Goodwill and Other Intangibles, Subtopic Internal-Use Software. We did not have significant capitalized development costs for internal use software for the year ended March 31, 2022. We capitalized development costs for internal use software of $0.2 million for both the years ended March 31, 2021 and March 31, 2020. We had capitalized costs, net of amortization, of approximately $2.1 million and $3.4 million as of March 31, 2022, and March 31, 2021, respectively, that is included in the accompanying consolidated balance sheets as a component of other intangible assets-net.

TREASURY STOCK — We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity on the accompanying consolidated balance sheets.

VENDOR CONSIDERATION — We receive payments and credits from vendors pursuant to volume incentive programs and shared marketing expense programs. Many of these programs extend over one or more quarters’ sales activities. Different programs have different vendor/program specific milestones to achieve. Amounts due from vendors as of March 31, 2022, and 2021 were $12.9 million and $18.2 million, respectively, which were included within accounts receivable-other, net in the accompanying balance sheets.

We recognize rebates pursuant to volume incentive programs, when the rebate is probable and reasonably estimable, based on a systematic and rational allocation of the cash consideration offered to the underlying transactions that result in our progress toward earning the rebate. When a rebate is not probable or not reasonably estimable, we recognized the rebate as the milestones are achieved or as cash is received.

We recognize rebates pursuant to shared marketing expense programs as a reduction of the related selling and administrative expenses in the period the program occurs when the consideration represents a reimbursement of specific, incremental, identifiable costs. We recognize consideration that exceeds the specific, incremental, identifiable costs as a reduction of cost of sales.

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REVENUES

12 Months Ended

Mar. 31, 2022

REVENUES [Abstract]

REVENUES

2. REVENUES

CONTRACT BALANCES

Accounts receivable – trade consists entirely of amounts due from contracts with customers. In addition, we had $47.5 million, $54.6 million, and $33.1 million of receivables from contracts with customers included within financing receivables as of March 31, 2022, 2021, and 2020, respectively. The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	March 31,
	2022		2021		2020
Current (included in deferred revenue)	$	85,826	$	72,299	$	54,486
Non-current (included in other liabilities)	$	30,086	$	26,042	$	16,395

Revenue recognized from the beginning contract liability balance was $57.5 million and $42.2 million for the fiscal year ended March 31, 2022, and 2021, 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):

Year ending March 31, 2023	$	45,471
2024		20,021
2025		7,064
2026		1,518
2027 and thereafter		357
Total remaining performance obligations	$	74,431

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

12 Months Ended

Mar. 31, 2022

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. Occasionally, our leases provide the lessee a bargain purchase option.

The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022		2021
Net sales	$	14,943	$	27,196
Cost of sales		12,478		17,855
Gross profit	$	2,465	$	9,341

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022		2021
Interest income on sales-type leases	$	3,904	$	7,602
Lease income on operating leases	$	24,711	$	15,864

FINANCING RECEIVABLES—NET

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

March 31, 2022	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	80,517		$	38,788		$	119,305
Unguaranteed residual value (1)		-			9,141			9,141
Unearned income		(2,728	)		(3,604	)		(6,332	)
Allowance for credit losses (2)		(708	)		(681	)		(1,389	)
Total, net	$	77,081		$	43,644		$	120,725
Reported as:
Current	$	45,415		$	16,077		$	61,492
Long-term		31,666			27,567			59,233
Total, net	$	77,081		$	43,644		$	120,725

(1) Includes unguaranteed residual values of $6,424 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.

The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	18,444
2024		11,267
2025		6,608
2026		1,881
2027 and thereafter		588
Total	$	38,788

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):

	March 31, 2022			March 31, 2021
Cost of equipment under operating leases	$	13,044		$	18,748
Accumulated depreciation		(7,985	)		(7,870	)
Investment in operating lease equipment—net (1)	$	5,059		$	10,878

(1) Amounts include estimated unguaranteed residual values of $1.7 million and $2.5 million as of March 31, 2022, and 2021, respectively.

The following table provides the future scheduled minimum lease rental payments for operating leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	2,402
2024		976
2025		173
Total	$	3,551

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 secured borrowings.

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of March 31, 2022, and March 31, 2021, we had financing receivables of $21.1 million and $60.5 million, respectively, and operating leases of $2.0 million and $3.3 million, respectively which were collateral for non-recourse notes payable. See Note 8, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. For the years ended March 31, 2022, 2021, and 2020, we recognized net gains of $18.2 million, $14.5 million, and $21.8 million, respectively, and total proceeds from these sales were $855.1 million, $364.0 million, and $593.7 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the services. As of March 31, 2022, and March 31, 2021, we had deferred revenue of $0.5 million and $0.4 million, respectively, for servicing obligations.

In a limited number of transfers accounted for as sales, we indemnified the assignee in the event that the lessee elects to early terminate the lease. As of March 31, 2022, our total potential liability that could result from these indemnities is immaterial.

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LESSEE ACCOUNTING

12 Months Ended

Mar. 31, 2022

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. As of March 31, 2022, and 2021, we had right-of-use assets of $6.9 million and $8.8 million, respectively. We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities, respectively. As of March 31, 2022, and 2021, we had current lease liabilities of $3.6 million and $3.9 million, respectively, and long-term lease liabilities of $3.3 million and $5.0 million, respectively. We recognized rent expense of $5.3 million and $6.1 million as part of selling, general, and administrative expenses during the years ended March 31, 2022, and March 31, 2021, respectively.

Supplemental information about the remaining lease terms and discount rates applied as of March 31, 2022, and March 30, 2021, are as follows:

	Year Ended March 31,
Lease term and Discount Rate	2022			2021
Weighted average remaining lease term (months)		29			32
Weighted average discount rate		3.2	%		3.7	%

The following table provides our future lease payments under our operating leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	3,635
2024		1,727
2025		1,301
2026		322
2027 and thereafter		156
Total lease payments		7,141
Less: interest		(271	)
Present value of lease liabilities	$	6,870

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GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Mar. 31, 2022

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 years ended March 31, 2022, and March 31, 2021, respectively (in thousands):

	Year ended March 31, 2022									Year ended March 31, 2021
	Goodwill			Accumulated Impairment Loss			Net Carrying Amount			Goodwill		Accumulated Impairment Loss			Net Carrying Amount
Beginning balance	$	135,318		$	(8,673	)	$	126,645		$	126,770	$	(8,673	)	$	118,097
Acquisitions		-			-			-			8,328		-			8,328
Foreign currency translations		(102	)		-			(102	)		220		-			220
Ending balance	$	135,216		$	(8,673	)	$	126,543		$	135,318	$	(8,673	)	$	126,645

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 March 31, 2022, and March 31, 2021, relates to our technology reportable segment, which we also determined to be one reporting unit.

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

In our annual tests as of October 1, 2021, and 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.

We performed our last quantitative goodwill impairment test as of March 31, 2020. At that time, we concluded that the fair value of our technology reporting unit substantially exceeded its carrying value. Our conclusions would not have been impacted by a ten percent change in our estimate of the fair value of the reporting unit.

OTHER INTANGIBLE ASSETS

Our other intangible assets consist of the following as of March 31, 2022, and March 31, 2021 (in thousands):

	March 31, 2022							March 31, 2021
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships & other intangibles	$	77,224	$	(52,087	)	$	25,137	$	77,335	$	(42,115	)	$	35,220
Capitalized software development		10,517		(8,404	)		2,113		10,553		(7,159	)		3,394
Total	$	87,741	$	(60,491	)	$	27,250	$	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 $10.1 million, $10.3 million, and $9.4 million for the years ended March 31, 2022, 2021 and 2020, respectively. The following table provides the future amortization expense for customer relationships and other intangible assets as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	8,024
2024		6,216
2025		4,645
2026		3,156
2027		1,887
2028 and thereafter		1,209
Total	$	25,137

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ALLOWANCE FOR CREDIT LOSSES

12 Months Ended

Mar. 31, 2022

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 years ended March 31, 2022, 2021 and 2020 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance as of March 31, 2019	$	1,579		$	505		$	530		$	2,614
Provision for credit losses		627			293			84			1,004
Write-offs and other		(425	)		-			(4	)		(429	)
Balance as of March 31, 2020		1,781			798			610			3,189
Provision for credit losses		367			503			566			1,436
Write-offs and other		(84	)		(89	)		(5	)		(178	)
Balance as of March 31, 2021		2,064			1,212			1,171			4,447
Provision for credit losses		482			(312	)		(272	)		(102	)
Write-offs and other		(135	)		(192	)		(218	)		(545	)
Balance as of March 31, 2022	$	2,411		$	708		$	681		$	3,800

We evaluate our customers using an internally assigned credit quality rating (“CQR”). The CQR categories of our financing receivables are:

• 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, 2022(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	$	35,264	$	28,005	$	1,297	$	345	$	2	$	4	$	64,917	$	(30,274	)	$	34,643
Average CQR		8,922		2,976		758		213		3		-		12,872		(4,763	)		8,109
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	44,186	$	30,981	$	2,055	$	558	$	5	$	4	$	77,789	$	(35,037	)	$	42,752
Lease receivables:
High CQR	$	14,549	$	5,002	$	2,499	$	902	$	50	$	11	$	23,013	$	(3,385	)	$	19,628
Average CQR		10,936		3,092		741		47		72		-		14,888		(347	)		14,541
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	25,485	$	8,094	$	3,240	$	949	$	122	$	11	$	37,901	$	(3,732	)	$	34,169
Total amortized cost (1)	$	69,671	$	39,075	$	5,295	$	1,507	$	127	$	15	$	115,690	$	(38,769	)	$	76,921

(1) Unguaranteed residual values of $6,424 thousand that we retained after selling the related lease receivable is 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.

The following table provides an aging analysis of our financing receivables as of March 31, 2022 (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	$	187	$	37	$	23	$	247	$	5,307	$	5,554	$	72,235	$	77,789
Lease receivables		115		325		430		870		639		1,509		36,392		37,901
Total	$	302	$	362	$	453	$	1,117	$	5,946	$	7,063	$	108,627	$	115,690

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 March 31, 2022 and March 31, 2021.

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PROPERTY AND EQUIPMENT-NET

12 Months Ended

Mar. 31, 2022

PROPERTY AND EQUIPMENT-NET [Abstract]

PROPERTY AND EQUIPMENT-NET

7. PROPERTY AND EQUIPMENT—NET

Property and equipment—net is a component of Property, equipment, and other assets. Our balance consists of the following (in thousands):

	March 31, 2022			March 31, 2021
Furniture, fixtures and equipment	$	28,640		$	26,612
Leasehold improvements		7,615			6,918
Capitalized software		3,822			4,153
Vehicles		476			546
Total assets		40,553			38,229
Accumulated depreciation and amortization		(32,642	)		(30,841	)
Property and equipment - net	$	7,911		$	7,388

Depreciation and amortization expense on property and equipment, including amounts recognized in cost of sales, was $5.4 million for both the years ended March 31, 2022 and March 31, 2021, and $4.8 million for the year ended March 31, 2020.

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NOTES PAYABLE AND CREDIT FACILITY

12 Months Ended

Mar. 31, 2022

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

NOTES PAYABLE AND CREDIT FACILITY

8. NOTES PAYABLE AND CREDIT FACILITY

CREDIT FACILITY

We finance the operations of our subsidiaries ePlus Technology, inc., ePlus Technology Services, inc., and SLAIT Consulting, LLC (collectively, the “Borrowers”) in our technology segment through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility has a floor plan facility and a revolving credit facility.

Under the floor plan facility, we had an outstanding balance of $145.3 million and $98.7 million as of March 31, 2022, and March 31, 2021, respectively. On our balance sheet, our liability under the floor plan facility is presented as accounts payable – floor plan.

We did not have an outstanding balance under the revolving credit facility as of March 31, 2022, or March 31, 2021.

The fair value of the outstanding balances under the WFCDF credit facility were approximately equal to their carrying value as of March 31, 2022, and March 31, 2021.

On October 13, 2021, the Borrowers amended, restated, and replaced in entirety their then-existing credit agreements with WFCDF. The new credit facility is established by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floorplan facility in favor of the Borrowers in the aggregate principal amount of up to $375 million, an increase from $275 million, together with a sublimit for a revolving credit facility for up to $100 million (collectively, the “2021 Credit Facility”).

The amount of principal available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory, each pursuant to a formula and subject to certain reserves. Loans accrue interest at a rate per annum equal to LIBOR plus 1.75%. The LIBOR rate is based upon one-month, three-month, six-month and 12-month LIBOR periods, as selected by the Borrowers, and subject to a floor of 0.00%.

Our borrowings under the 2021 Credit Facility are secured by the assets of the Borrowers. Additionally, the 2021 Credit Facility requires a guaranty of $10.5 million by ePlus inc.

Under the 2021 Credit Facility, and under the predecessor WFCDF credit facility, the Borrowers are restricted in their ability to pay dividends to ePlus inc. unless their available borrowing meets or met certain thresholds. As of March 31, 2022, and March 31, 2021, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

The 2021 Credit Facility has an initial one-year term, which automatically renews for successive one-year terms thereafter. However, either the Borrowers or WFCDF may terminate by providing a written termination notice to the other party no less than 90 days prior to such termination.

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

The loss of the WFCDF credit facility 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 March 31, 2022, and 2021 we had $13.1 million and $18.1 million, respectively, in recourse borrowings arising from one installment payment arrangement within our technology segment. 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 due under this installment agreement to calculate our payable balance using an interest rate of 3.50% as of both March 31, 2022, and 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 March 31, 2022, and March 31, 2021, we had $21.2 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 periodically 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 March 31, 2022, and March 31, 2021, respectively.

Our recourse and non-recourse notes payable as of March 31, 2022 mature as follows:

	Recourse notes payable		Non-recourse notes payable
Year ended March 31, 2023	$	7,848	$	17,315
2024		6,207		2,696
2025		-		961
2026		-		584
Total maturities	$	14,055	$	21,556

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2022

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 or other legal dispute 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 our expectations, our financial condition and operating results for that period may 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 us in the future, and these matters could relate to prior, current, or future transactions or events.

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EARNINGS PER SHARE

12 Months Ended

Mar. 31, 2022

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

10. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net earnings per share include the potential dilution of securities that could participate in our earnings, but not securities that are anti-dilutive.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed in our consolidated statements of operations for the fiscal years ended March 31, 2022, 2021 and 2020 (in thousands, except per share data):

	2022		2021		2020
Net earnings attributable to common shareholders - basic and diluted	$	105,600	$	74,397	$	69,082
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,638		26,674		26,654
Effect of dilutive shares		228		160		176
Weighted average shares common outstanding — diluted		26,866		26,834		26,830
Earnings per common share - basic	$	3.96	$	2.79	$	2.59
Earnings per common share - diluted	$	3.93	$	2.77	$	2.57

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STOCKHOLDERS' EQUITY

12 Months Ended

Mar. 31, 2022

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

11. STOCKHOLDERS’ EQUITY

STOCK SPLIT AND TREASURY STOCK

On November 9, 2021, our Board of Directors (“Board”) approved a two-for-one stock split of our common stock in the form of a stock dividend paid on December 13, 2021, to shareholders of record as of close of business on November 29, 2021. All share and per share information have been retroactively adjusted to reflect the stock split and the incremental par value of the newly issued shares was recorded with the offset to additional paid-in capital.

On November 10, 2021, we retired 2,139,918 shares of treasury stock, adjusted for the stock split, with a carrying value of $82.2 million, which was deducted from common stock, for the par value of the retired shares, and from retained earnings, for the excess of cost over the par value.

SHARE REPURCHASE PLAN

On March 24, 2022, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2022. On March 18, 2021, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, adjusted for the stock split, over a 12-month period beginning May 28, 2021. On May 20, 2020, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, adjusted for the stock split, over a 12-month period beginning May 28, 2020.

These plans 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 year ended March 31, 2022, retroactively adjusted for the stock split, we purchased 227,990 shares of our outstanding common stock at an average cost of $48.48 per share for a total purchase price of $11.1 million under the share repurchase plan; we also acquired 55,430 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 year ended March 31, 2021, retroactively adjusted for the stock split, we purchased 118,202 shares of our outstanding common stock at an average cost of $35.92 per share for a total purchase price of $4.2 million under the share repurchase plan; we also acquired 75,280 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

12 Months Ended

Mar. 31, 2022

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

12. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

In each of the years ended March 31, 2022, 2021 and 2020, we issued share-based payment awards and had outstanding share-based payment awards under the following plans: (1) the 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), and (2) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”). On September 16, 2021, our shareholders approved the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”). The 2021 Employee LTIP is effective October 1, 2021 and replaces the 2012 Employee LTIP. Beginning September 16, 2021, we permanently ceased issuing any additional shares under the 2012 Employee LTIP.

2012 Employee LTIP and 2021 Employee LTIP

On September 16, 2021, our stockholders approved the 2021 Employee LTIP that was adopted by the Board on July 21, 2021. Under the 2021 Employee LTIP, 3,000,000 shares, retroactively adjusted for the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

On September 13, 2012, our stockholders approved the 2012 Employee LTIP that was adopted by the Board on July 10, 2012. Under the 2012 Employee LTIP, 3,000,000 shares, retroactively adjusted to reflect the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

The purpose of these plans is to encourage our employees to acquire a proprietary interest in the growth and performance of ePlus, thus enhancing the value of ePlus for the benefit of its stockholders, and to enhance our ability to attract and retain exceptionally qualified individuals. These plans are administered by the Compensation Committee. Shares issuable under these plans may consist of authorized but unissued shares or shares held in our treasury. Under these plans, the Compensation Committee will determine the time and method of exercise or vesting of the awards. Shares under these plans will not be used to compensate our outside directors, who may be compensated under the separate 2017 Director LTIP, as discussed below.

2017 Director LTIP

On September 12, 2017, our stockholders approved the 2017 Director LTIP that was adopted by the Board on July 24, 2017. Under the 2017 Director LTIP, 300,000 shares, retroactively adjusted for the stock split, were authorized for grant to non-employee directors. The purpose of the 2017 Director LTIP is to align the economic interests of the directors with the interests of stockholders by including equity as a component of pay and to attract, motivate and retain experienced and knowledgeable directors. Each director receives an annual grant of restricted stock having a grant-date fair value equal to the cash compensation earned by an outside director during our fiscal year ended immediately before the respective annual grant-date. These restricted shares are prohibited from being sold, transferred, assigned, pledged, or otherwise encumbered or disposed of. The shares vest half on the one-year anniversary and half on the second-year anniversary from the date of the grant. In addition, each director may also elect to receive stock in lieu of their cash compensation. Stock received in lieu of cash vests immediately.

STOCK OPTION ACTIVITY

During the years ended March 31, 2022, 2021, and 2020, we did not grant any stock options, nor did we have any outstanding stock options.

RESTRICTED STOCK ACTIVITY

During the year ended March 31, 2022, we granted 14,316 restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 155,722 restricted shares, adjusted for the stock split, under the 2012 Employee LTIP, and no shares were granted under the 2021 Employee LTIP.

Cumulatively, as of March 31, 2022, we granted a total of 81,476 restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 2,144,578 restricted shares, adjusted for the stock split, under the 2012 Employee LTIP.

A summary of the non-vested restricted shares for year ended March 31, 2022, reflecting the stock split, is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2021		366,756		$	37.49
Granted		170,038		$	46.56
Vested		(185,716	)	$	39.19
Forfeited		(7,272	)	$	34.07
Nonvested March 31, 2022		343,806		$	41.01

In each of the years ended March 31, 2022, 2021 and 2020, we used the closing stock price on the grant date or, if the grant date falls on a date the stock was not traded, the previous day’s closing stock price for the fair value of the award.

The weighted-average grant date fair value of restricted shares granted during the years ended March 31, 2022, 2021, and 2020 was $46.56, $35.95, and $36.47, respectively.

The aggregated fair value of restricted shares that vested during the years ended March 31, 2022, 2021, and 2020 was $7.1 million, $7.7 million, and $7.6 million, respectively.

Upon each vesting period of the restricted stock awards to employees, participants are subject to minimum tax withholding obligations. The 2012 Employee LTIP, the 2021 Employee LTIP, and the 2017 Director LTIP allows us to withhold a sufficient number of shares due to the participant to satisfy their minimum tax withholding obligations. For the year ended March 31, 2022, we withheld 55,430 shares of common stock, adjusted for the stock split, at a value of $2.6 million, which was included in treasury stock. For the year ended March 31, 2021, we withheld 75,280 shares of common stock, adjusted for the stock split, at a value of $2.7 million, which was included in treasury stock.

COMPENSATION EXPENSE

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We account for forfeitures when they occur. There are no additional conditions for vesting other than service conditions.

During the years ended March 31, 2022, 2021 and 2020, we recognized $7.1 million, $7.2 million, and $8.0 million, respectively, of total share-based compensation expense. We recognized tax benefits related to share-based compensation of $2.0 million, $2.2 million, and $2.2 million for the years ended March 31, 2022, 2021, and 2020, respectively, which were included as a reduction to our provision for income taxes. As of March 31, 2022, the total unrecognized compensation expense related to non-vested restricted stock was $8.7 million, which is expected to be recognized over a weighted-average period of 27 months.

We also provide our employees with a contributory 401(k) profit sharing plan. We may make contributions, which are fully vested when they are made, to the plan. These contributions are not required. The decision whether to make contributions is entirely within our discretion. For the years ended March 31, 2022, 2021, and 2020, we recognized expense for employer contributions to the plan of $3.4 million, $3.0 million, and $2.8 million, respectively.

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INCOME TAXES

12 Months Ended

Mar. 31, 2022

INCOME TAXES [Abstract]

INCOME TAXES

13. INCOME TAXES

We account for our tax positions in accordance with Codification Topic 740. 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 March 31, 2022, and March 31, 2021. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. Tax years 2019, 2020, and 2021 are subjected to examination by federal and state taxing authorities. Various state and local income tax returns are also under examination by taxing authorities. We do not believe that the outcome of any examination will have a material impact on our financial statements.

A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):

	Year Ended March 31,
	2022			2021			2020
Income tax expense computed at the U.S. statutory federal rate	$	30,845		$	22,450		$	20,182
State income tax expense—net of federal benefit		8,937			6,941			5,659
Non-deductible executive compensation		1,749			2,052			613
Other		(247	)		1,066			423
Provision for income taxes	$	41,284		$	32,509		$	26,877
Effective income tax rate		28.1	%		30.4	%		28.0	%

The components of the provision for income taxes are as follows (in thousands):

	Year Ended March 31,
	2022			2021			2020
Current:
Federal	$	32,309		$	26,054		$	19,367
State		11,681			9,882			9,520
Foreign		894			770			200
Total current expense		44,884			36,706			29,087
Deferred:
Federal		(3,289	)		(3,067	)		(492	)
State		(370	)		(1,096	)		(1,799	)
Foreign		59			(34	)		81
Total deferred benefit		(3,600	)		(4,197	)		(2,210	)
Provision for income taxes	$	41,284		$	32,509		$	26,877

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands):

	March 31,
	2022			2021
Deferred tax assets:
Accrued vacation	$	2,391		$	2,537
Deferred revenue		5,090			4,227
Allowance for credit losses		951			1,048
Restricted stock		616			772
Other deferred tax assets		743			1,552
Accrued bonus		2,532			2,277
Lease liabilities		1,857			2,476
Other credits and carryforwards		249			-
Gross deferred tax assets		14,429			14,889
Less: valuation allowance		(250	)		-
Net deferred tax assets		14,179			14,889
Deferred tax liabilities:
Property and equipment		(2,295	)		(2,391	)
Operating leases		(2,759	)		(6,948	)
Prepaid expenses		(887	)		(912	)
Right-of-use assets		(1,869	)		(2,419	)
Tax deductible goodwill		(1,319	)		(751	)
Total deferred tax  liabilities		(9,129	)		(13,421	)
Net deferred tax asset	$	5,050		$	1,468

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. As of March 31, 2022, we established a valuation allowance of $0.3 million, to offset gross deferred tax assets primarily attributable to cumulative net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards. We believe that it is more likely than not that we will realize the remaining gross deferred tax assets through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities.

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FAIR VALUE MEASUREMENTS

12 Months Ended

Mar. 31, 2022

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

14. FAIR VALUE MEASUREMENTS

We account for the fair values of our assets and liabilities utilizing a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value.

The following table provides the fair value of our assets and liabilities measured at fair value as categorized within the fair value hierarchy as of March 31, 2022, 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)
March 31, 2022
Assets:
Money market funds	$	18,138	$	18,138	$	-	$	-
March 31, 2021
Assets:
Money market funds	$	45,134	$	45,134	$	-	$	-

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BUSINESS COMBINATIONS

12 Months Ended

Mar. 31, 2022

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

15. BUSINESS COMBINATIONS

SYSTEMS MANAGEMENT PLANNING (“SMP”)

On December 31, 2020, our subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of SMP, an established provider of technology solutions and services in upstate New York and the Northeast. The acquisition enhances ePlus’ footprint across the region, broadens our technology solution offerings especially in the areas of collaboration and supporting virtual employees, and adds to ePlus’ set of commercial, enterprise and state, local, and education customers.

Our sum of consideration transferred was $27.0 million consisting of $29.0 million paid in cash at closing less $2.0 million that was paid back to us in our quarter ended March 31, 2021 related to a working capital adjustment. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

	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

12 Months Ended

Mar. 31, 2022

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

16. SEGMENT REPORTING

Our segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chief operating decision-maker (“CODM”) for deciding how to allocate resources and for assessing performance. Our CODM is our Chief Executive Officer and President. Our CODM conducts our operations through two operating segments- our technology segment and our financing segment. Our technology segment includes sales of information technology products, third-party software, third-party maintenance, advanced professional and managed services and our proprietary software to commercial, state, and local governments, and government contractors. Our financing segment consists of the financing of IT equipment, software and related services to commercial, state, and local governments, and government contractors. Our CODM uses several measures to allocate resources and assess performance. Our reported measure is earnings before taxes.

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

	Year Ended March 31,
	2022							2021						2020
	Technology		Financing		Total			Technology		Financing		Total		Technology		Financing		Total
Net Sales
Product	$	1,492,411	$	87,983	$	1,580,394		$	1,305,789	$	60,369	$	1,366,158	$	1,337,022	$	58,266	$	1,395,288
Service		240,625		-		240,625			202,165		-		202,165		193,116		-		193,116
Total		1,733,036		87,983		1,821,019			1,507,954		60,369		1,568,323		1,530,138		58,266		1,588,404
Cost of Sales
Product		1,175,789		35,154		1,210,943			1,036,627		13,050		1,049,677		1,069,110		7,663		1,076,773
Service		149,094		-		149,094			125,092		-		125,092		120,440		-		120,440
Total		1,324,883		35,154		1,360,037			1,161,719		13,050		1,174,769		1,189,550		7,663		1,197,213
Gross Profit		408,153		52,829		460,982			346,235		47,319		393,554		340,588		50,603		391,191
Selling, general, and administrative		283,690		13,427		297,117			256,210		15,053		271,263		264,123		15,059		279,182
Depreciation and amortization		14,535		111		14,646			13,839		112		13,951		14,016		140		14,156
Interest and financing costs		928		975		1,903			521		1,484		2,005		294		2,280		2,574
Operating expenses		299,153		14,513		313,666			270,570		16,649		287,219		278,433		17,479		295,912
Operating income		109,000		38,316		147,316			75,665		30,670		106,335		62,155		33,124		95,279
Other income (expense)						(432	)						571						680
Earnings before tax					$	146,884						$	106,906					$	95,959
Net Sales
Contracts with customers	$	1,718,093	$	34,842	$	1,752,935		$	1,484,104	$	12,369	$	1,496,473	$	1,514,507	$	4,589	$	1,519,096
Financing and other		14,943		53,141		68,084			23,850		48,000		71,850		15,631		53,677		69,308
Total	$	1,733,036	$	87,983	$	1,821,019		$	1,507,954	$	60,369	$	1,568,323	$	1,530,138	$	58,266	$	1,588,404
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	15,592	$	8,713	$	24,305		$	14,568	$	5,423	$	19,991	$	14,516	$	4,640	$	19,156
Purchases of property, equipment and operating lease equipment	$	4,951	$	18,231	$	23,182		$	4,752	$	6,761	$	11,513	$	4,842	$	2,167	$	7,009
Selected Financial Data - Balance Sheet
Total assets	$	941,743	$	224,460	$	1,166,203		$	828,576	$	248,199	$	1,076,775	$	709,854	$	199,259	$	909,113

TECHNOLOGY SEGMENT DISAGGREGATION OF REVENUE

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized below (in thousands):

	Year Ended March 31,
	2022			2021			2020
Customer end market:
Telecom, Media & Entertainment	$	502,408		$	371,913		$	289,958
Technology		250,485			251,683			324,239
State and local government and educational institutions		241,769			245,919			243,092
Healthcare		270,481			200,067			233,894
Financial Services		155,160			198,761			191,679
All others		312,733			239,611			247,276
Net sales		1,733,036			1,507,954			1,530,138
Less: Revenue from financing and other		(14,943	)		(23,850	)		(15,631	)
Revenue from contracts with customers	$	1,718,093		$	1,484,104		$	1,514,507
	Year Ended March 31,
	2022			2021			2020
Vendor:
Cisco Systems	$	672,821		$	537,041		$	607,719
Dell EMC		148,782			107,336			84,939
Juniper Networks		92,965			91,946			68,339
HP Inc. & HPE		56,171			59,838			71,802
Arista Networks		44,280			51,789			75,281
NetApp		91,948			58,020			59,812
All others		626,069			601,984			562,246
Net sales		1,733,036			1,507,954			1,530,138
Less: Revenue from financing and other		(14,943	)		(23,850	)		(15,631	)
Revenue from contracts with customers	$	1,718,093		$	1,484,104		$	1,514,507

FINANCING SEGMENT DISAGGREGATION OF REVENUE

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

GEOGRAPHIC INFORMATION

The geographic information for the years ended March 31, 2022, 2021, and 2020 was as follows (in thousands):

	Year Ended March 31,
	2022		2021		2020
Net sales:
US	$	1,716,525	$	1,476,466	$	1,508,329
Non US		104,494		91,857		80,075
Total	$	1,821,019	$	1,568,323	$	1,588,404
	March 31,
	2022		2021
Long-lived tangible assets:
US	$	21,837	$	33,504
Non US		716		931
Total	$	22,553	$	34,435

Our long-lived tangible assets include property and equipment-net, operating leases-net, and equipment that has been returned to us at the termination of the lease.

Sales to Verizon Communications Inc. represented 24%, 19% and 15% of net sales for the years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively, all of which related to our technology segment.

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Mar. 31, 2022

Schedule II - Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

ePlus inc. AND SUBSIDIARIES

Schedule II - Valuation and Qualifying Accounts

(Dollars in thousands)

	Balance at Beginning of Period		Charged to Costs and Expenses			Deductions/ Write-Offs			Balance at End of Period
Allowance for sales returns: (1)
Year ended March 31, 2020		852		2,678			(2,492	)		1,038
Year ended March 31, 2021		1,038		2,909			(2,758	)		1,189
Year ended March 31, 2022		1,189		2,158			(2,101	)		1,246
Allowance for credit losses:
Year ended March 31, 2020		2,614		1,004			(429	)		3,189
Year ended March 31, 2021		3,189		1,436			(178	)		4,447
Year ended March 31, 2022		4,447		(102	)		(545	)		3,800
Valuation for deferred taxes:
Year ended March 31, 2020		1,065		320			-			1,385
Year ended March 31, 2021		1,385		-			(1,385	)		-
Year ended March 31, 2022		-		250			-			250

(1) These amounts represent the gross profit effect of sales returns during the respective years. Expected merchandise returns after year-end for sales made before year-end were $7.8 million, $7.4 million, and $6.5 million as of March 31, 2022, 2021, and 2020, respectively.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Mar. 31, 2022

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION — The 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 acquired businesses are included in the consolidated financial statements from the dates of acquisition.

USE OF ESTIMATES

USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual asset values, vendor consideration, lease classification, goodwill and intangibles, 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.

STOCK SPLIT

STOCK SPLIT — On December 13, 2021, we completed a two-for-one stock split in the form of a stock dividend. References made to outstanding shares or per share amounts in the accompanying financial statements and disclosures have been retroactively adjusted for this stock split.

ALLOWANCE FOR CREDIT LOSSES

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We write off financing receivables when we deem them to be uncollectable. Since the onset of the COVID-19 pandemic, we have measured our allowance using higher than historical loss rates to reflect forecasted credit deterioration.

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS — We account for business combinations using the acquisition method, which requires that the total purchase price for each of the acquired entity be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The allocation process requires an analysis of intangible assets, such as customer relationships, trade names, acquired contractual rights and assumed contractual commitments and legal contingencies to identify and record all assets acquired and liabilities assumed at their fair value.

We record any premium paid over the fair value of the acquired net assets as goodwill. Our initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. We include the results of operations for the acquired company in our financial statements from the acquisition date.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS — Cash and cash equivalents consist primarily of interest-bearing accounts and money market funds that consist of short-term US treasury securities. We consider all highly liquid investments, including those with an original maturity of three months or less at the date of acquisition, to be cash equivalents. We have a lockbox account whose purpose is to collect and distribute customer payments under financing arrangements. As of March 31, 2022, we were not holding any amounts in trust for third-party recipients. As of March 31, 2021, we had $0.7 million being held in trust for third-party recipients within our lockbox account. As of March 31, 2022, and March 31, 2021, there were no restrictions on the withdrawal of funds from our money market funds.

CONCENTRATIONS OF RISK

CONCENTRATIONS OF RISK — Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, and financing receivables. Cash and cash equivalents may include short-term investments that are maintained principally with financial institutions in the US. Our accounts receivable-trade balance as of March 31, 2022, and 2021 included approximately 14% and 20%, respectively, concentration of invoices due from Verizon Communications Inc. The risk on our accounts receivable and financing receivables is reduced by having a broad customer base in a diverse range of industries and through the ongoing evaluation of collectability of our portfolio. The credit risk is further mitigated by transferring certain of our financing receivables to financial institutions on a non-recourse basis and, for our lease receivables, by owning the underlying asset. A substantial portion of our sales are products from Cisco Systems, which represented approximately 39%, 36%, and 40%, of our technology segment net sales for the years ended March 31, 2022, 2021, and 2020, respectively.

DEFERRED COSTS

DEFERRED COSTS — When a contract is within the scope of Accounting Standards Codification (“Codification”) Topic 606, Revenue from Contracts with Customers (“Codification Topic 606”), we defer costs of fulfilling the contract when they generate or enhance resources that will be used by us in satisfying performance obligations in the future. Additionally, we capitalize costs that are incremental to obtaining the contracts, predominately sales commissions, and expense them in proportion to each completed contract performance obligation.

DEFERRED REVENUE

DEFERRED REVENUE — We recognize deferred revenue when cash payments are received or due in advance of our performance.

EARNINGS PER SHARE

EARNINGS PER SHARE — Basic earnings per share is calculated by dividing net earnings attributable to common stockholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share reflects the potential dilution of securities that could participate in our earnings, including restricted stock awards during each period.

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT — We follow the guidance in Codification Topic 820 Fair Value Measurements (“Codification Topic 820”) which governs how to measure fair value for financial reporting. This topic defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. This topic also establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value:

● Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

● Level 2 – Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in active markets, that are observable for the asset or liability, either directly or indirectly.

● Level 3 – Unobservable inputs for the asset or liability. The fair values are determined based on model-based techniques such as discounted cash flow models using inputs that we could not corroborate with market data.

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS — For financial instruments such as cash, short-term investments, accounts receivables, accounts payable and other current liabilities, we consider the recorded value of the financial instruments to approximate the fair value due to their short maturities. On March 31, 2022, the carrying amounts of our notes receivables, recourse and non-recourse payables were $80.5 million, $13.1 million, and $21.2 million, respectively, and their fair values were $80.0 million, $13.1 million, and $21.2 million, respectively. On March 31, 2021, the carrying amounts of our notes receivables, recourse and non-recourse payables were $112.6 million, $18.1 million, and $56.1 million, respectively, and their fair values were $113.2 million, $18.1 million, and $56.3 million, respectively.

FINANCING RECEIVABLES AND OPERATING LEASES

FINANCING RECEIVABLES AND OPERATING LEASES — Financing receivables and operating leases consists of notes receivable, sales-type leases, and operating leases. We issue financing receivables for periods generally between 2 to 6 years, with most terms ranging between 3 to 4 years. When we lease equipment under an operating lease, we recognize the underlying asset at cost and depreciate it on a straight-line bases over its estimated useful life. We estimate that the useful life for most information technology (“IT”) equipment under lease is 4 years.

FOREIGN CURRENCY MATTERS

FOREIGN CURRENCY MATTERS — Our functional currency is the US dollar. Our international subsidiaries typically use their local currency as their functional currency. We translate the assets and liabilities of our international subsidiaries into US dollars at the spot rate in effect at the applicable reporting date. We translate the revenues and expenses of our international subsidiaries into US dollars at the average exchange rates in effect during the applicable period. We report the resulting foreign currency translation adjustment as accumulated other comprehensive income (loss), which is reflected as a separate component of stockholders’ equity. We report all foreign currency transaction gains or losses in other income (expense) on our consolidated statement of operations. For the years ended March 31, 2022, 2021, and 2020, we recognized a loss of $0.5 million, a gain of $0.5 million, and a loss of $0.4 million, respectively, due to foreign currency transactions.

GOODWILL

GOODWILL — We test goodwill for impairment on an annual basis, as of October 1, 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 amount.

In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test. We may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.

In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

IMPLEMENTATION COSTS OF A HOSTING ARRANGEMENT

IMPLEMENTATION COSTS OF A HOSTING ARRANGEMENT- We capitalize implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We classify these capitalized costs in the same balance sheet line item as the amounts prepaid for the related hosting arrangement and we present the amortization of these capitalized costs in the same income statement line item as the service fees for the related hosting arrangement. Our long-term prepaids are included in our consolidated balance sheets as part of property, equipment, and other assets. We amortize the capitalized implementation costs over the term of the hosting arrangement.

INCOME TAXES

INCOME TAXES — Deferred income taxes are accounted for in accordance with Codification Topic 740 Income Taxes (“Codification Topic 740”). Under this method, deferred income tax assets and liabilities are determined based on the temporary differences between the financial statement reporting and tax bases of assets and liabilities, using tax rates currently in effect. Future tax benefits, such as net operating loss carry-forwards, are recognized to the extent that realization of these benefits is considered to be more likely than not. We review our deferred tax assets at least annually and make necessary valuation adjustments.

In addition, we account for uncertain tax positions in accordance with Codification Topic 740. Specifically, the Topic prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related de-recognition, classification, interest and penalties, accounting for interim periods, disclosure, and transition of uncertain tax positions. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense.

INVENTORIES

INVENTORIES — Inventories are stated at the lower of cost and net realizable value. Cost is determined using a weighted average cost method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Our determination of the net realizable value for inventories is based on the terms of underlying purchase commitments from our customers, current economic conditions including the impact of COVID-19, and other relevant factors.

LESSEE ACCOUNTING

LESSEE ACCOUNTING — We lease office space for periods up to 6 years. At the lease commencement date, we recognize operating lease liabilities based on the present value of the future minimum lease payments. In determining the present value of future minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date. When the future minimum payments encompass non-lease components, we account for the lease and non-lease components as a single lease component. We elected not to recognize right-of-use assets and lease liabilities for leases with an initial term of 12 months or less. We recognize lease expense on a straight-line basis over the lease term beginning on the commencement date.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT — Property and equipment are stated at cost, net of accumulated depreciation and amortization. We recognize property and equipment obtained through a business combination at its fair market value as of the acquisition date. We compute depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. We typically depreciate internal use IT equipment over three years, perpetual software licenses over five years, furniture and fixtures over five years, and telecommunications equipment over seven years.

RESIDUAL ASSETS

RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term. In a sales-type lease, we recognize the unguaranteed residual asset, measured on a discounted basis, upon lease commencement. In our subsequent accounting for the lease, we increase the unguaranteed residual asset using the effective interest method. We evaluate residual values for impairment on a quarterly basis. We recognize impairments as incurred. We do not recognize upward adjustments due to changes in estimates of residual values.

REVENUE RECOGNITION

REVENUE RECOGNITION — We recognize most of our revenues from the sales of third-party products, third-party software, third-party maintenance, software support, and services, ePlus professional and managed services, and hosting ePlus proprietary software. We recognize revenue from these sales under the guidance in Codification Topic 606.

The core principle of Codification Topic 606 is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. We account for a contract under Codification Topic 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance, and collectability of consideration is probable.

Revenues are reported net of sales refunds, including an estimate of future returns based on an evaluation of historical sales returns, current economic conditions, volume, and other relevant factors.

Our contracts with customers may include multiple promises that are distinct performance obligations. For such arrangements, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin.

We recognize revenue when (or as) we satisfy a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. Depending on the nature of each performance obligation, this may be at a point in time or over time, as further described below.

We typically invoice our customers for third-party products upon shipment, unless our customers lease the equipment through our financing segment, in which case the arrangement is accounted for as a lease in accordance with Codification Topic 842, Leases (“Codification Topic 842”). We typically invoice our customers for third-party software upon delivery and third-party services at the point of sale, unless our customers finance these products through our financing segment, in which case we record a financing receivable based on the terms of the arrangement. 

Product revenue

Sales of third-party products

We are the principal in sales of third-party products. As such, we recognize sales on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer.

In some instances, our customers may request that we bill them for a product but retain physical possession of the product until later delivery, commonly known as “bill-and-hold” arrangements. We have warehousing agreements with select customers wherein title to products ordered through the agreements transfers to our customer at the point we invoice the customer and after the product arrives at our warehouse. In these “bill-and-hold” arrangements, we recognize revenue when the customer has ordered the product through their warehousing agreement with us or signed a bill-and-hold agreement with us, the product is identified separately as belonging to the customer, and the product is ready for delivery to the customer.

We recognize sales of off-lease equipment within our financing segment when control passes to the customer, which is typically the date that title to the equipment is transferred per the sales agreement.

Sales of third-party software

We are typically the principal in sales of third-party software. Sales are recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the software to the customer.

Sales of third-party maintenance, software support, and services

We are the agent in sales of third-party maintenance, software support, and services as the third-party controls the service until it is transferred to the customer. Similarly, we are the agent in sales of third-party software and accompanying third-party support when the third-party software benefits the customer only in conjunction with the accompanying support. In these sales, we consider the third-party software and support as inputs to a single performance obligation. In all these sales where we are the agent, we recognize sales on a net basis at the point that our customer and vendor accept the terms and conditions of the arrangement.

Freight and sales tax

We present freight billed to our customers within sales and the related freight charged to us within cost of sales. We present sales tax collected from customers and remittances to governmental authorities on a net basis.

Financing revenue and other

We account for leases to customers in accordance with Codification Topic 842. We utilize a portfolio approach by grouping together many similar assets being leased to a single customer.

We classify our leases as either sales-type leases or operating leases. We classify leases as sales-type leases if any one of five criteria are met, each of which indicate that the lease transfers control of the underlying asset to the lessee. We classify our other leases as operating leases.

For sales-type leases, upon lease commencement, we recognize the present value of the lease payments and the residual asset discounted using the rate implicit in the lease. When we are financing equipment provided by another dealer, we typically do not have any selling profit or loss arising from the lease. When we are the dealer of the equipment being leased, we typically recognize revenue in the amount of the lease receivable and cost of sales in the amount of the carrying value of the underlying asset minus the unguaranteed residual asset. After the commencement date, we recognize interest income as part of net sales using the effective interest method.

For operating leases, we recognize the underlying asset as an operating lease asset. We depreciate the asset on a straight-line basis to its estimated residual value over its estimated useful life. We recognize the lease payments over the lease term on a straight-line basis as part of net sales.

In all our leases, we recognize variable lease payments, primarily reimbursement for property taxes associated with the leased asset, as part of net sales in the period in which the changes in facts and circumstances on which the variable lease payments are based occur. We exclude from revenues and expenses any sales taxes reimbursed by the lessee.

We also finance third-party software and third-party services for our customers, which we classify as notes-receivable. We recognize interest income on our notes-receivable using the effective interest method.

We account for transfers of our financial assets, under Codification Topic 860 Transfers and Servicing (“Codification Topic 860”). When a transfer meets all the requirements for sale accounting, we derecognize the financial asset and record a net gain or loss that is included in net sales.

Service revenue

Sales of ePlus professional, managed services, and staffing

ePlus professional services offerings include assessments, project management, and staging, configuration, and integration. ePlus managed service offerings range from monitoring and notification to a fully outsourced network management or service desk solution. ePlus staffing delivers a full range of staffing solutions, including short-term, long-term, temporary-to-hire, and direct-hire IT professionals. In all these arrangements, we satisfy our performance obligation and recognize revenue over time.

In arrangements for ePlus professional services and staffing, we provide services under both time and materials and fixed price contracts. When services are provided on a time and materials basis, we recognize sales at agreed-upon billing rates as services are performed. When services are provided on a fixed fee basis, we recognize sales over time in proportion to our progress toward complete satisfaction of the performance obligation. We typically measure progress based on costs incurred in proportion to total estimated costs, commonly referred to as the “cost-to-cost” method.

In arrangements for ePlus managed services, our arrangement is typically a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). We typically recognize sales from these services on a straight-line basis over the period services are provided.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION — We account for share-based compensation in accordance with Codification Topic 718 Compensation—Stock Compensation. We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We account for forfeitures when they occur. There are no additional conditions for vesting other than service conditions.

SOFTWARE DEVELOPMENT COSTS

SOFTWARE DEVELOPMENT COSTS — We capitalize costs for the development of internal use software under the Codification Topic 350-40 Intangibles—Goodwill and Other Intangibles, Subtopic Internal-Use Software. We did not have significant capitalized development costs for internal use software for the year ended March 31, 2022. We capitalized development costs for internal use software of $0.2 million for both the years ended March 31, 2021 and March 31, 2020. We had capitalized costs, net of amortization, of approximately $2.1 million and $3.4 million as of March 31, 2022, and March 31, 2021, respectively, that is included in the accompanying consolidated balance sheets as a component of other intangible assets-net.

TREASURY STOCK

TREASURY STOCK — We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity on the accompanying consolidated balance sheets.

VENDOR CONSIDERATION

VENDOR CONSIDERATION — We receive payments and credits from vendors pursuant to volume incentive programs and shared marketing expense programs. Many of these programs extend over one or more quarters’ sales activities. Different programs have different vendor/program specific milestones to achieve. Amounts due from vendors as of March 31, 2022, and 2021 were $12.9 million and $18.2 million, respectively, which were included within accounts receivable-other, net in the accompanying balance sheets.

We recognize rebates pursuant to volume incentive programs, when the rebate is probable and reasonably estimable, based on a systematic and rational allocation of the cash consideration offered to the underlying transactions that result in our progress toward earning the rebate. When a rebate is not probable or not reasonably estimable, we recognized the rebate as the milestones are achieved or as cash is received.

We recognize rebates pursuant to shared marketing expense programs as a reduction of the related selling and administrative expenses in the period the program occurs when the consideration represents a reimbursement of specific, incremental, identifiable costs. We recognize consideration that exceeds the specific, incremental, identifiable costs as a reduction of cost of sales.

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REVENUES (Tables)

12 Months Ended

Mar. 31, 2022

REVENUES [Abstract]

Balance of Receivables, Contract Assets, and Contract Liabilities

The following table provides the balance of contract liabilities from contracts with customers (in thousands):

	March 31,
	2022		2021		2020
Current (included in deferred revenue)	$	85,826	$	72,299	$	54,486
Non-current (included in other liabilities)	$	30,086	$	26,042	$	16,395

Remaining Performance Obligations

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

Year ending March 31, 2023	$	45,471
2024		20,021
2025		7,064
2026		1,518
2027 and thereafter		357
Total remaining performance obligations	$	74,431

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 (Tables)

12 Months Ended

Mar. 31, 2022

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 years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022		2021
Net sales	$	14,943	$	27,196
Cost of sales		12,478		17,855
Gross profit	$	2,465	$	9,341

The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the years ended March 31, 2022, and 2021 (in thousands):

	Year Ended March 31,
	2022		2021
Interest income on sales-type leases	$	3,904	$	7,602
Lease income on operating leases	$	24,711	$	15,864

Notes Receivable Net and Investments in Leases

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

March 31, 2022	Notes Receivable			Lease Receivables			Financing Receivables
Gross receivables	$	80,517		$	38,788		$	119,305
Unguaranteed residual value (1)		-			9,141			9,141
Unearned income		(2,728	)		(3,604	)		(6,332	)
Allowance for credit losses (2)		(708	)		(681	)		(1,389	)
Total, net	$	77,081		$	43,644		$	120,725
Reported as:
Current	$	45,415		$	16,077		$	61,492
Long-term		31,666			27,567			59,233
Total, net	$	77,081		$	43,644		$	120,725

(1) Includes unguaranteed residual values of $6,424 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.

Future Scheduled Minimum Lease Payments

The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	18,444
2024		11,267
2025		6,608
2026		1,881
2027 and thereafter		588
Total	$	38,788

Investment in Operating Lease Equipment - Net

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

	March 31, 2022			March 31, 2021
Cost of equipment under operating leases	$	13,044		$	18,748
Accumulated depreciation		(7,985	)		(7,870	)
Investment in operating lease equipment—net (1)	$	5,059		$	10,878

(1) Amounts include estimated unguaranteed residual values of $1.7 million and $2.5 million as of March 31, 2022, and 2021, respectively.

Future Minimum Rental Payments for Operating Leases

The following table provides the future scheduled minimum lease rental payments for operating leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	2,402
2024		976
2025		173
Total	$	3,551

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LESSEE ACCOUNTING (Tables)

12 Months Ended

Mar. 31, 2022

LESSEE ACCOUNTING [Abstract]

Supplemental Information of Remaining Lease Terms and Discount Rates

Supplemental information about the remaining lease terms and discount rates applied as of March 31, 2022, and March 30, 2021, are as follows:

	Year Ended March 31,
Lease term and Discount Rate	2022			2021
Weighted average remaining lease term (months)		29			32
Weighted average discount rate		3.2	%		3.7	%

Future Lease Payments Under Operating Leases

The following table provides our future lease payments under our operating leases as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	3,635
2024		1,727
2025		1,301
2026		322
2027 and thereafter		156
Total lease payments		7,141
Less: interest		(271	)
Present value of lease liabilities	$	6,870

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

12 Months Ended

Mar. 31, 2022

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Changes in Goodwill

The following table summarizes the changes in the carrying amount of goodwill for the years ended March 31, 2022, and March 31, 2021, respectively (in thousands):

	Year ended March 31, 2022									Year ended March 31, 2021
	Goodwill			Accumulated Impairment Loss			Net Carrying Amount			Goodwill		Accumulated Impairment Loss			Net Carrying Amount
Beginning balance	$	135,318		$	(8,673	)	$	126,645		$	126,770	$	(8,673	)	$	118,097
Acquisitions		-			-			-			8,328		-			8,328
Foreign currency translations		(102	)		-			(102	)		220		-			220
Ending balance	$	135,216		$	(8,673	)	$	126,543		$	135,318	$	(8,673	)	$	126,645

Other Intangible Assets

Our other intangible assets consist of the following as of March 31, 2022, and March 31, 2021 (in thousands):

	March 31, 2022							March 31, 2021
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships & other intangibles	$	77,224	$	(52,087	)	$	25,137	$	77,335	$	(42,115	)	$	35,220
Capitalized software development		10,517		(8,404	)		2,113		10,553		(7,159	)		3,394
Total	$	87,741	$	(60,491	)	$	27,250	$	87,888	$	(49,274	)	$	38,614

Future Amortization Expense for Customer Relationships and Other Intangible assets

The following table provides the future amortization expense for customer relationships and other intangible assets as of March 31, 2022 (in thousands):

Year ending March 31, 2023	$	8,024
2024		6,216
2025		4,645
2026		3,156
2027		1,887
2028 and thereafter		1,209
Total	$	25,137

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ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Mar. 31, 2022

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 years ended March 31, 2022, 2021 and 2020 (in thousands):

	Accounts Receivable			Notes Receivable			Lease Receivables			Total
Balance as of March 31, 2019	$	1,579		$	505		$	530		$	2,614
Provision for credit losses		627			293			84			1,004
Write-offs and other		(425	)		-			(4	)		(429	)
Balance as of March 31, 2020		1,781			798			610			3,189
Provision for credit losses		367			503			566			1,436
Write-offs and other		(84	)		(89	)		(5	)		(178	)
Balance as of March 31, 2021		2,064			1,212			1,171			4,447
Provision for credit losses		482			(312	)		(272	)		(102	)
Write-offs and other		(135	)		(192	)		(218	)		(545	)
Balance as of March 31, 2022	$	2,411		$	708		$	681		$	3,800

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 CQR and by credit origination year as of March 31, 2022(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	$	35,264	$	28,005	$	1,297	$	345	$	2	$	4	$	64,917	$	(30,274	)	$	34,643
Average CQR		8,922		2,976		758		213		3		-		12,872		(4,763	)		8,109
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	44,186	$	30,981	$	2,055	$	558	$	5	$	4	$	77,789	$	(35,037	)	$	42,752
Lease receivables:
High CQR	$	14,549	$	5,002	$	2,499	$	902	$	50	$	11	$	23,013	$	(3,385	)	$	19,628
Average CQR		10,936		3,092		741		47		72		-		14,888		(347	)		14,541
Low CQR		-		-		-		-		-		-		-		-			-
Total	$	25,485	$	8,094	$	3,240	$	949	$	122	$	11	$	37,901	$	(3,732	)	$	34,169
Total amortized cost (1)	$	69,671	$	39,075	$	5,295	$	1,507	$	127	$	15	$	115,690	$	(38,769	)	$	76,921

(1) Unguaranteed residual values of $6,424 thousand that we retained after selling the related lease receivable is 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 March 31, 2022 (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	$	187	$	37	$	23	$	247	$	5,307	$	5,554	$	72,235	$	77,789
Lease receivables		115		325		430		870		639		1,509		36,392		37,901
Total	$	302	$	362	$	453	$	1,117	$	5,946	$	7,063	$	108,627	$	115,690

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 March 31, 2022 and March 31, 2021.

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PROPERTY AND EQUIPMENT-NET (Tables)

12 Months Ended

Mar. 31, 2022

PROPERTY AND EQUIPMENT-NET [Abstract]

Property and Equipment-Net

Property and equipment—net is a component of Property, equipment, and other assets. Our balance consists of the following (in thousands):

	March 31, 2022			March 31, 2021
Furniture, fixtures and equipment	$	28,640		$	26,612
Leasehold improvements		7,615			6,918
Capitalized software		3,822			4,153
Vehicles		476			546
Total assets		40,553			38,229
Accumulated depreciation and amortization		(32,642	)		(30,841	)
Property and equipment - net	$	7,911		$	7,388

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NOTES PAYABLE AND CREDIT FACILITY (Tables)

12 Months Ended

Mar. 31, 2022

NOTES PAYABLE AND CREDIT FACILITY [Abstract]

Recourse and Non-recourse Notes Payable

Our recourse and non-recourse notes payable as of March 31, 2022 mature as follows:

	Recourse notes payable		Non-recourse notes payable
Year ended March 31, 2023	$	7,848	$	17,315
2024		6,207		2,696
2025		-		961
2026		-		584
Total maturities	$	14,055	$	21,556

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EARNINGS PER SHARE (Tables)

12 Months Ended

Mar. 31, 2022

EARNINGS PER SHARE [Abstract]

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

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed in our consolidated statements of operations for the fiscal years ended March 31, 2022, 2021 and 2020 (in thousands, except per share data):

	2022		2021		2020
Net earnings attributable to common shareholders - basic and diluted	$	105,600	$	74,397	$	69,082
Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,638		26,674		26,654
Effect of dilutive shares		228		160		176
Weighted average shares common outstanding — diluted		26,866		26,834		26,830
Earnings per common share - basic	$	3.96	$	2.79	$	2.59
Earnings per common share - diluted	$	3.93	$	2.77	$	2.57

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SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Mar. 31, 2022

SHARE-BASED COMPENSATION [Abstract]

Summary of Grants

A summary of the non-vested restricted shares for year ended March 31, 2022, reflecting the stock split, is as follows:

	Number of Shares			Weighted Average Grant-date Fair Value
Nonvested April 1, 2021		366,756		$	37.49
Granted		170,038		$	46.56
Vested		(185,716	)	$	39.19
Forfeited		(7,272	)	$	34.07
Nonvested March 31, 2022		343,806		$	41.01

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INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2022

INCOME TAXES [Abstract]

Reconciliation of Income Taxes to Statutory Federal Income Tax Rate

A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):

	Year Ended March 31,
	2022			2021			2020
Income tax expense computed at the U.S. statutory federal rate	$	30,845		$	22,450		$	20,182
State income tax expense—net of federal benefit		8,937			6,941			5,659
Non-deductible executive compensation		1,749			2,052			613
Other		(247	)		1,066			423
Provision for income taxes	$	41,284		$	32,509		$	26,877
Effective income tax rate		28.1	%		30.4	%		28.0	%

Components of Provision for Income Taxes

The components of the provision for income taxes are as follows (in thousands):

	Year Ended March 31,
	2022			2021			2020
Current:
Federal	$	32,309		$	26,054		$	19,367
State		11,681			9,882			9,520
Foreign		894			770			200
Total current expense		44,884			36,706			29,087
Deferred:
Federal		(3,289	)		(3,067	)		(492	)
State		(370	)		(1,096	)		(1,799	)
Foreign		59			(34	)		81
Total deferred benefit		(3,600	)		(4,197	)		(2,210	)
Provision for income taxes	$	41,284		$	32,509		$	26,877

Components of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities were as follows (in thousands):

	March 31,
	2022			2021
Deferred tax assets:
Accrued vacation	$	2,391		$	2,537
Deferred revenue		5,090			4,227
Allowance for credit losses		951			1,048
Restricted stock		616			772
Other deferred tax assets		743			1,552
Accrued bonus		2,532			2,277
Lease liabilities		1,857			2,476
Other credits and carryforwards		249			-
Gross deferred tax assets		14,429			14,889
Less: valuation allowance		(250	)		-
Net deferred tax assets		14,179			14,889
Deferred tax liabilities:
Property and equipment		(2,295	)		(2,391	)
Operating leases		(2,759	)		(6,948	)
Prepaid expenses		(887	)		(912	)
Right-of-use assets		(1,869	)		(2,419	)
Tax deductible goodwill		(1,319	)		(751	)
Total deferred tax  liabilities		(9,129	)		(13,421	)
Net deferred tax asset	$	5,050		$	1,468

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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Mar. 31, 2022

FAIR VALUE MEASUREMENTS [Abstract]

Fair Value Hierarchy of Financial Instruments

The following table provides the fair value of our assets and liabilities measured at fair value as categorized within the fair value hierarchy as of March 31, 2022, 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)
March 31, 2022
Assets:
Money market funds	$	18,138	$	18,138	$	-	$	-
March 31, 2021
Assets:
Money market funds	$	45,134	$	45,134	$	-	$	-

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BUSINESS COMBINATIONS (Tables)

12 Months Ended

Mar. 31, 2022

Systems Management Planning (SMP) [Member]

Business Combination [Abstract]

Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed

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)

12 Months Ended

Mar. 31, 2022

SEGMENT REPORTING [Abstract]

Segment Reporting Information, by Reportable Segment

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

	Year Ended March 31,
	2022							2021						2020
	Technology		Financing		Total			Technology		Financing		Total		Technology		Financing		Total
Net Sales
Product	$	1,492,411	$	87,983	$	1,580,394		$	1,305,789	$	60,369	$	1,366,158	$	1,337,022	$	58,266	$	1,395,288
Service		240,625		-		240,625			202,165		-		202,165		193,116		-		193,116
Total		1,733,036		87,983		1,821,019			1,507,954		60,369		1,568,323		1,530,138		58,266		1,588,404
Cost of Sales
Product		1,175,789		35,154		1,210,943			1,036,627		13,050		1,049,677		1,069,110		7,663		1,076,773
Service		149,094		-		149,094			125,092		-		125,092		120,440		-		120,440
Total		1,324,883		35,154		1,360,037			1,161,719		13,050		1,174,769		1,189,550		7,663		1,197,213
Gross Profit		408,153		52,829		460,982			346,235		47,319		393,554		340,588		50,603		391,191
Selling, general, and administrative		283,690		13,427		297,117			256,210		15,053		271,263		264,123		15,059		279,182
Depreciation and amortization		14,535		111		14,646			13,839		112		13,951		14,016		140		14,156
Interest and financing costs		928		975		1,903			521		1,484		2,005		294		2,280		2,574
Operating expenses		299,153		14,513		313,666			270,570		16,649		287,219		278,433		17,479		295,912
Operating income		109,000		38,316		147,316			75,665		30,670		106,335		62,155		33,124		95,279
Other income (expense)						(432	)						571						680
Earnings before tax					$	146,884						$	106,906					$	95,959
Net Sales
Contracts with customers	$	1,718,093	$	34,842	$	1,752,935		$	1,484,104	$	12,369	$	1,496,473	$	1,514,507	$	4,589	$	1,519,096
Financing and other		14,943		53,141		68,084			23,850		48,000		71,850		15,631		53,677		69,308
Total	$	1,733,036	$	87,983	$	1,821,019		$	1,507,954	$	60,369	$	1,568,323	$	1,530,138	$	58,266	$	1,588,404
Selected Financial Data - Statement of Cash Flow
Depreciation and amortization	$	15,592	$	8,713	$	24,305		$	14,568	$	5,423	$	19,991	$	14,516	$	4,640	$	19,156
Purchases of property, equipment and operating lease equipment	$	4,951	$	18,231	$	23,182		$	4,752	$	6,761	$	11,513	$	4,842	$	2,167	$	7,009
Selected Financial Data - Balance Sheet
Total assets	$	941,743	$	224,460	$	1,166,203		$	828,576	$	248,199	$	1,076,775	$	709,854	$	199,259	$	909,113

Technology Segment Disaggregation of Revenue

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are summarized below (in thousands):

	Year Ended March 31,
	2022			2021			2020
Customer end market:
Telecom, Media & Entertainment	$	502,408		$	371,913		$	289,958
Technology		250,485			251,683			324,239
State and local government and educational institutions		241,769			245,919			243,092
Healthcare		270,481			200,067			233,894
Financial Services		155,160			198,761			191,679
All others		312,733			239,611			247,276
Net sales		1,733,036			1,507,954			1,530,138
Less: Revenue from financing and other		(14,943	)		(23,850	)		(15,631	)
Revenue from contracts with customers	$	1,718,093		$	1,484,104		$	1,514,507
	Year Ended March 31,
	2022			2021			2020
Vendor:
Cisco Systems	$	672,821		$	537,041		$	607,719
Dell EMC		148,782			107,336			84,939
Juniper Networks		92,965			91,946			68,339
HP Inc. & HPE		56,171			59,838			71,802
Arista Networks		44,280			51,789			75,281
NetApp		91,948			58,020			59,812
All others		626,069			601,984			562,246
Net sales		1,733,036			1,507,954			1,530,138
Less: Revenue from financing and other		(14,943	)		(23,850	)		(15,631	)
Revenue from contracts with customers	$	1,718,093		$	1,484,104		$	1,514,507

Geographical Information

The geographic information for the years ended March 31, 2022, 2021, and 2020 was as follows (in thousands):

	Year Ended March 31,
	2022		2021		2020
Net sales:
US	$	1,716,525	$	1,476,466	$	1,508,329
Non US		104,494		91,857		80,075
Total	$	1,821,019	$	1,568,323	$	1,588,404
	March 31,
	2022		2021
Long-lived tangible assets:
US	$	21,837	$	33,504
Non US		716		931
Total	$	22,553	$	34,435

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents, Concentrations of Risk, Financial Instruments, Financing Receivables and Operating Leases (Details) $ in Millions			12 Months Ended
	Dec. 13, 2021	Nov. 09, 2021	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2020
Stock Split [Abstract]
Stock split, conversion ratio	2	2
CASH AND CASH EQUIVALENTS [Abstract]
Amounts held in trust for third party recipients			$ 0.0	$ 0.7
Minimum [Member]
FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]
Financing receivables and operating leases term			2 years
Financing receivables and operating leases, term range			3 years
Estimated useful life			3 years
Maximum [Member]
FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]
Financing receivables and operating leases term			6 years
Financing receivables and operating leases, term range			4 years
Estimated useful life			7 years
Information Technology Equipment [Member]
FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]
Estimated useful life			4 years
Carrying Amount [Member]
FINANCIAL INSTRUMENTS [Abstract]
Notes receivable			$ 80.5	112.6
Carrying Amount [Member] | Recourse [Member]
FINANCIAL INSTRUMENTS [Abstract]
Notes payable			13.1	18.1
Carrying Amount [Member] | Non-recourse [Member]
FINANCIAL INSTRUMENTS [Abstract]
Notes payable			21.2	56.1
Fair Value [Member]
FINANCIAL INSTRUMENTS [Abstract]
Notes receivable			80.0	113.2
Fair Value [Member] | Recourse [Member]
FINANCIAL INSTRUMENTS [Abstract]
Notes payable			13.1	18.1
Fair Value [Member] | Non-recourse [Member]
FINANCIAL INSTRUMENTS [Abstract]
Notes payable			$ 21.2	$ 56.3
Accounts Receivable-Trade [Member] | Customer Concentration Risk [Member] | Verizon Communications Inc. [Member] | Technology Segment [Member]
CONCENTRATIONS OF RISK [Abstract]
Percentage of concentration risk			14.00%	20.00%
Net Sales [Member] | Customer Concentration Risk [Member] | Verizon Communications Inc. [Member] | Technology Segment [Member]
CONCENTRATIONS OF RISK [Abstract]
Percentage of concentration risk			24.00%	19.00%	15.00%
Net Sales [Member] | Product Concentration Risk [Member] | Cisco Systems [Member] | Technology Segment [Member]
CONCENTRATIONS OF RISK [Abstract]
Percentage of concentration risk			39.00%	36.00%	40.00%

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Foreign Currency Matters, Lessee Accounting, Property and Equipment (Details) - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
FOREIGN CURRENCY MATTERS [Abstract]
Foreign currency translation gain (loss)	$ (0.5)	$ 0.5	$ (0.4)
Minimum [Member]
PROPERTY AND EQUIPMENT [Abstract]
Property, plant and equipment, useful life	3 years
Maximum [Member]
LESSEE ACCOUNTING [Abstract]
Operating lease term of contract	6 years
PROPERTY AND EQUIPMENT [Abstract]
Property, plant and equipment, useful life	7 years
Internal Use IT Equipment [Member]
PROPERTY AND EQUIPMENT [Abstract]
Property, plant and equipment, useful life	3 years
Software Licenses [Member]
PROPERTY AND EQUIPMENT [Abstract]
Property, plant and equipment, useful life	5 years
Furniture, Fixtures [Member]
PROPERTY AND EQUIPMENT [Abstract]
Property, plant and equipment, useful life	5 years
Telecommunications Equipment [Member]
PROPERTY AND EQUIPMENT [Abstract]
Property, plant and equipment, useful life	7 years

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Software Development Costs, Vendor Consideration (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
CAPITALIZATION OF COSTS OF SOFTWARE FOR INTERNAL USE [Abstract]
Intangible assets	$ 27,250	$ 38,614
VENDOR CONSIDERATION [Abstract]
Amount due from vendors	12,900	18,200
Software Capitalized for Internal [Member]
CAPITALIZATION OF COSTS OF SOFTWARE FOR INTERNAL USE [Abstract]
Intangible assets	0	200	$ 200
Other assets	$ 2,100	$ 3,400

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REVENUES (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Contract with Customer, Asset and Liability [Abstract]
Accounts receivable - trade	$ 47,500	$ 54,600	$ 33,100
Current (included in deferred revenue)	85,826	72,299	54,486
Non-current (included in other liabilities)	30,086	26,042	$ 16,395
Revenue recognized from the beginning contract liability	57,500	$ 42,200
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	74,431
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 45,471
Expected timing of satisfaction, period	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	$ 20,021
Expected timing of satisfaction, period	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	$ 7,064
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 1,518
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-04-01
Revenue, Performance Obligation Satisfied over Time [Abstract]
Remaining performance obligation	$ 357
Expected timing of satisfaction, period

XML

FINANCING RECEIVABLES AND OPERATING LEASES (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2019
Profit Recognized for Sales-type Leases [Abstract]
Net sales	$ 14,943	$ 27,196
Cost of sales	12,478	17,855
Gross profit	2,465	9,341
Interest Income on Sales-type Leases [Abstract]
Interest income on sales-type leases	3,904	7,602
Lease income on operating leases	24,711	15,864
Financing Receivables, Net [Abstract]
Unguaranteed residual value	6,424	9,453
Initial direct costs, net of amortization		425
Allowance for credit losses	(3,800)	(4,447)	$ (3,189)	$ (2,614)
Reported as [Abstract]
Current	61,492	106,272
Unguaranteed residual value for sales-type leases	6,424	9,453
Future scheduled minimum lease payments [Abstract]
Year ending March 31, 2023	18,444
2024	11,267
2025	6,608
2026	1,881
2027 and thereafter	588
Total	38,788
Investment in operating lease equipment - net [Abstract]
Cost of equipment under operating leases	13,044	18,748
Accumulated depreciation	(7,985)	(7,870)
Investment in operating lease equipment - net	5,059	10,878
Unguaranteed residual value of operating lease equipment net	1,700	2,500
Future scheduled minimum lease rental payments [Abstract]
Year ending March 31, 2023	2,402
2024	976
2025	173
Total	3,551
Transfers of Financial Assets [Abstract]
Operating leases	6,900	8,800
Gain on sale of financing receivables	18,200	14,500	21,800
Proceeds from sale of financing receivables	855,100	364,000	593,700
Deferred revenue for servicing obligation	500	400
Notes Payable [Member] | Asset Pledged as Collateral [Member] | Nonrecourse [Member]
Transfers of Financial Assets [Abstract]
Finance receivables	21,100	60,500
Operating leases	2,000	3,300
Notes Receivable [Member]
Financing Receivables, Net [Abstract]
Gross receivables	80,517	112,641
Unguaranteed residual value	0	0
Initial direct costs, net of amortization		425
Unearned income	(2,728)	0
Allowance for credit losses	(708)	(1,212)	(798)	(505)
Total, net	77,081	111,854
Reported as [Abstract]
Current	45,415	73,175
Long-term	31,666	38,679
Total, net	77,081	111,854
Lease Receivables [Member]
Financing Receivables, Net [Abstract]
Gross receivables	38,788	68,393
Unguaranteed residual value	9,141	14,876
Initial direct costs, net of amortization		0
Unearned income	(3,604)	(8,393)
Allowance for credit losses	(681)	(1,171)	$ (610)	$ (530)
Total, net	43,644	73,705
Reported as [Abstract]
Current	16,077	33,097
Long-term	27,567	40,608
Total, net	43,644	73,705
Financing Receivables [Member]
Financing Receivables, Net [Abstract]
Gross receivables	119,305	181,034
Unguaranteed residual value	9,141	14,876
Initial direct costs, net of amortization		425
Unearned income	(6,332)	(8,393)
Allowance for credit losses	(1,389)	(2,383)
Total, net	120,725	185,559
Reported as [Abstract]
Current	61,492	106,272
Long-term	59,233	79,287
Total, net	$ 120,725	$ 185,559

XML

LESSEE ACCOUNTING (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lessee, Operating Lease [Abstract]
Right-of-use assets	$ 6,900	$ 8,800
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, equipment, and other assets	Property, equipment, and other assets
Current lease liabilities	$ 3,600	$ 3,900
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities	Other current liabilities
Long-term lease liabilities	$ 3,300	$ 5,000
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Rent expense	$ 5,300	$ 6,100
Lease Term and Discount Rate [Abstract]
Weighted average remaining lease term (months)	29 months	32 months
Weighted average discount rate	3.20%	3.70%
Future Lease Payments under Operating Leases [Abstract]
Year ending March 31, 2023	$ 3,635
2024	1,727
2025	1,301
2026	322
2027 and thereafter	156
Total lease payments	7,141
Less: interest	(271)
Present value of lease liabilities	$ 6,870
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current	Other Liabilities, Current
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Maximum [Member]
Lessee, Operating Lease [Abstract]
Operating lease term	6 years

XML

GOODWILL AND OTHER INTANGIBLE ASSETS, Goodwill (Details) $ in Thousands	12 Months Ended
	Mar. 31, 2022 USD ($) Unit	Mar. 31, 2021 USD ($) Unit
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 135,318	$ 126,770
Goodwill, Impairment Loss, Beginning Balance	(8,673)	(8,673)
Goodwill, Net Carrying Amount, Beginning Balance	126,645	118,097
Acquisitions	0	8,328
Foreign currency translations	(102)	220
Goodwill, Ending Balance	135,216	135,318
Goodwill, Impairment Loss, Ending Balance	(8,673)	(8,673)
Goodwill, Net Carrying Amount, Ending Balance	$ 126,543	$ 126,645
Number of reporting units | Unit	1	1
Percentage change in the fair value	10.00%

XML

GOODWILL AND OTHER INTANGIBLE ASSETS, Other Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Other Intangible Assets [Abstract]
Gross carrying amount	$ 87,741	$ 87,888
Accumulated amortization	(60,491)	(49,274)
Intangible Assets, Net Carrying Amount	27,250	38,614
Future amortization expense [Abstract]
Intangible Assets, Net Carrying Amount	27,250	38,614
Customer Relationships & Other Intangibles [Member]
Other Intangible Assets [Abstract]
Gross carrying amount	77,224	77,335
Accumulated amortization	(52,087)	(42,115)
Intangible Assets, Net Carrying Amount	25,137	35,220
Total amortization expense	10,100	10,300	$ 9,400
Future amortization expense [Abstract]
Year ending March 31, 2023	8,024
2024	6,216
2025	4,645
2026	3,156
2027	1,887
2028 and thereafter	1,209
Intangible Assets, Net Carrying Amount	$ 25,137	35,220
Customer Relationships & Other Intangibles [Member] | Minimum [Member]
Other Intangible Assets [Abstract]
Estimated useful life	5 years
Customer Relationships & 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	$ 10,517	10,553
Accumulated amortization	(8,404)	(7,159)
Intangible Assets, Net Carrying Amount	$ 2,113	3,394
Estimated useful life	5 years
Future amortization expense [Abstract]
Intangible Assets, Net Carrying Amount	$ 2,113	$ 3,394

XML

ALLOWANCE FOR CREDIT LOSSES, Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Activity in reserves for credit losses [Roll Forward]
Balance	$ 4,447	$ 3,189	$ 2,614
Provision for credit losses	(102)	1,436	1,004
Write-offs and other	(545)	(178)	(429)
Balance	3,800	4,447	3,189
Accounts Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	2,064	1,781	1,579
Provision for credit losses	482	367	627
Write-offs and other	(135)	(84)	(425)
Balance	2,411	2,064	1,781
Notes Receivable [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,212	798	505
Provision for credit losses	(312)	503	293
Write-offs and other	(192)	(89)	0
Balance	708	1,212	798
Lease Receivables [Member]
Activity in reserves for credit losses [Roll Forward]
Balance	1,171	610	530
Provision for credit losses	(272)	566	84
Write-offs and other	(218)	(5)	(4)
Balance	$ 681	$ 1,171	$ 610

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ALLOWANCE FOR CREDIT LOSSES, Amortized Cost Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021	$ 69,671	$ 153,825
2021/2020	39,075	18,085
2020/2019	5,295	4,458
2019/2018	1,507	1,512
2018/2017	127	184
2017	15
Total	115,690	178,064
Transfers	(38,769)	(78,427)
Net credit exposure	76,921	99,637
Unguaranteed residual value	6,424	9,453
Lease receivable and initial direct costs of notes receivable, net of amortization		425
Notes Receivable [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021	44,186	101,482
2021/2020	30,981	8,718
2020/2019	2,055	1,643
2019/2018	558	779
2018/2017	5	19
2017	4
Total	77,789	112,641
Transfers	(35,037)	(66,367)
Net credit exposure	42,752	46,274
Unguaranteed residual value	0	0
Lease receivable and initial direct costs of notes receivable, net of amortization		425
Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021	25,485	52,343
2021/2020	8,094	9,367
2020/2019	3,240	2,815
2019/2018	949	733
2018/2017	122	165
2017	11
Total	37,901	65,423
Transfers	(3,732)	(12,060)
Net credit exposure	34,169	53,363
Unguaranteed residual value	$ 9,141	14,876
Lease receivable and initial direct costs of notes receivable, net of amortization		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	$ 35,264	93,793
2021/2020	28,005	6,250
2020/2019	1,297	769
2019/2018	345	771
2018/2017	2	19
2017	4
Total	64,917	101,602
Transfers	(30,274)	(63,471)
Net credit exposure	34,643	38,131
High CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021	14,549	28,898
2021/2020	5,002	5,885
2020/2019	2,499	1,798
2019/2018	902	463
2018/2017	50	125
2017	11
Total	23,013	37,169
Transfers	(3,385)	(7,468)
Net credit exposure	$ 19,628	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	$ 8,922	7,689
2021/2020	2,976	2,468
2020/2019	758	550
2019/2018	213	8
2018/2017	3	0
2017	0
Total	12,872	10,715
Transfers	(4,763)	(2,896)
Net credit exposure	8,109	7,819
Average CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021	10,936	23,445
2021/2020	3,092	3,482
2020/2019	741	1,017
2019/2018	47	270
2018/2017	72	40
2017	0
Total	14,888	28,254
Transfers	(347)	(4,592)
Net credit exposure	$ 14,541	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	0	0
2018/2017	0	0
2017	0
Total	0	324
Transfers	0	0
Net credit exposure	0	324
Low CQR [Member] | Lease Receivables [Member]
Credit Risk Profile, Segregated by Class [Abstract]
2022/2021	0	0
2021/2020	0	0
2020/2019	0	0
2019/2018	0	0
2018/2017	0	0
2017	0
Total	0	0
Transfers	0	0
Net credit exposure	$ 0	$ 0

XML

ALLOWANCE FOR CREDIT LOSSES, Aging Analysis (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	$ 7,063	$ 9,616
Unbilled	108,627	168,448
Total	115,690	178,064
Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	5,554	5,471
Unbilled	72,235	107,170
Total	77,789	112,641
Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Billed	1,509	4,145
Unbilled	36,392	61,278
Total	37,901	65,423
Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	1,117	3,810
Past Due [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	247	2,231
Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	870	1,579
31 to 60 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	302	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	187	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	115	804
61 to 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	362	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	37	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	325	132
> 90 Days Past Due [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	453	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	23	673
> 90 Days Past Due [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	430	643
Current [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	5,946	5,806
Current [Member] | Notes Receivable [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	5,307	3,240
Current [Member] | Lease Receivables [Member]
Age of the Recorded Notes Receivable Balance Disaggregated Based on Internally Assigned CQR [Abstract]
Total	$ 639	$ 2,566

XML

PROPERTY AND EQUIPMENT-NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Property and equipment - net [Abstract]
Total assets	$ 40,553	$ 38,229
Accumulated depreciation and amortization	(32,642)	(30,841)
Property and equipment - net	7,911	7,388
Depreciation expense on property and equipment	5,400	5,400	$ 4,800
Furniture, Fixtures and Equipment [Member]
Property and equipment - net [Abstract]
Total assets	28,640	26,612
Leasehold Improvements [Member]
Property and equipment - net [Abstract]
Total assets	7,615	6,918
Capitalized Software [Member]
Property and equipment - net [Abstract]
Total assets	3,822	4,153
Vehicles [Member]
Property and equipment - net [Abstract]
Total assets	$ 476	$ 546

XML

NOTES PAYABLE AND CREDIT FACILITY (Details) - USD ($)	12 Months Ended
	Mar. 31, 2022	Oct. 13, 2021	Sep. 30, 2021	Mar. 31, 2021
Revolving Credit Facility [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility		$ 100,000,000
2021 Credit Facility [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility		$ 375,000,000
Guarantor obligations for credit facility, maximum	$ 10,500,000
2021 Credit Facility [Member] | LIBOR [Member]
Credit Facility [Abstract]
Basis spread on reference rate	1.75%
Debt instrument term of variable rate	one-month, three-month, six-month and 12-month
Debt instrument floor rate	0.00%
Recourse [Member]
Debt Maturity [Abstract]
Year ending March 31, 2023	$ 7,848,000
2024	6,207,000
2025	0
2026	0
Long-term debt	14,055,000
Non-recourse [Member]
Debt Maturity [Abstract]
Year ending March 31, 2023	17,315,000
2024	2,696,000
2025	961,000
2026	584,000
Long-term debt	$ 21,556,000
Notes Payable [Member] | Recourse [Member]
Notes Payable [Abstract]
Weighted average interest rate of notes	3.50%			3.50%
Debt Maturity [Abstract]
Long-term debt	$ 13,100,000			$ 18,100
Notes Payable [Member] | Non-recourse [Member]
Notes Payable [Abstract]
Weighted average interest rate of notes	3.59%			3.35%
Debt Maturity [Abstract]
Long-term debt	$ 21,200,000			$ 56,100,000
WFCDF [Member]
Credit Facility [Abstract]
Amount outstanding under credit facility	$ 0
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] | Floor Plan Facility [Member]
Credit Facility [Abstract]
Amount outstanding under credit facility	$ 145,300,000			98,700,000
WFCDF [Member] | Revolving Credit Facility [Member]
Credit Facility [Abstract]
Amount outstanding under credit facility	$ 0			$ 0
WFCDF [Member] | 2021 Credit Facility [Member]
Credit Facility [Abstract]
Maximum borrowing capacity under credit facility			$ 275,000,000
Initial term	1 year
Renewal term	1 year
Period of notice required to terminate credit facility at year end	90 days

XML

EARNINGS PER SHARE, Calculation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share, Basic and Diluted [Abstract]
Net earnings attributable to common shareholders - basic and diluted	$ 105,600	$ 74,397	$ 69,082
Basic and diluted common shares outstanding [Abstract]
Weighted average common shares outstanding - basic (in shares)	26,638	26,674	26,654
Effect of dilutive shares (in shares)	228	160	176
Weighted average shares common outstanding - diluted (in shares)	26,866	26,834	26,830
Earnings per common share - basic (in dollars per share)	$ 3.96	$ 2.79	$ 2.59
Earnings per common share - diluted (in dollars per share)	$ 3.93	$ 2.77	$ 2.57

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STOCKHOLDERS' EQUITY, Stock Split and Treasury Stock (Details) $ in Thousands				12 Months Ended
	Dec. 13, 2021	Nov. 10, 2021 USD ($) shares	Nov. 09, 2021	Mar. 31, 2022 USD ($)
Stock Split and Treasury Stock [Abstract]
Stock split, conversion ratio	2		2
Dividend payable, date to be paid				Dec. 13, 2021
Dividend payable, date of record				Nov. 29, 2021
Retirement of treasury stock				$ 0
Treasury Stock [Member]
Stock Split and Treasury Stock [Abstract]
Treasury stock shares retired (in shares) | shares		2,139,918
Retirement of treasury stock				$ (82,246)
Common Stock and Retained Earnings [Member]
Stock Split and Treasury Stock [Abstract]
Retirement of treasury stock		$ 82,200

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STOCKHOLDERS' EQUITY, Share Repurchase Plan (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 24, 2022	Mar. 18, 2021	May 20, 2020
Share Repurchase Plan [Abstract]
Authorized number of shares under stock repurchase program (in shares)			1,000,000	1,000,000	1,000,000
Common stock repurchased during the period (in shares)	227,990	118,202
Average cost of share repurchased (in dollars per share)	$ 48.48	$ 35.92
Common stock repurchased during the period	$ 11.1	$ 4.2
Shares repurchased to satisfy tax withholding obligation (in shares)	55,430	75,280
Value of shares repurchased to satisfy tax withholding obligation	$ 2.6	$ 2.7

XML

SHARE-BASED COMPENSATION, Director and Employee LTIP (Details)	12 Months Ended
	Mar. 31, 2022 shares
2021 Employee LTIP [Member]
Share-Based Plans [Abstract]
Number of shares authorized (in shares)	3,000,000
2012 Employee LTIP [Member]
Share-Based Plans [Abstract]
Number of shares authorized (in shares)	3,000,000
2017 Director LTIP [Member]
Share-Based Plans [Abstract]
Number of shares authorized (in shares)	300,000
2017 Director LTIP [Member] | Tranche One [Member]
Share-Based Plans [Abstract]
Shares vesting period	1 year
Shares vesting percentage	50.00%
2017 Director LTIP [Member] | Tranche Two [Member]
Share-Based Plans [Abstract]
Shares vesting period	2 years
Shares vesting percentage	50.00%

XML

SHARE-BASED COMPENSATION, Stock Option and Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended			55 Months Ended	115 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2022	Mar. 31, 2022
Stock Option Activity [Abstract]
Stock options granted (in shares)	0	0	0
Options outstanding (in shares)	0	0	0	0	0
Additional Disclosures [Abstract]
Vested share-based awards withheld to satisfy income tax obligations (in shares)	55,430	75,280
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)	366,756
Granted (in shares)	170,038
Vested (in shares)	(185,716)
Forfeited (in shares)	(7,272)
Nonvested at end of period (in shares)	343,806	366,756		343,806	343,806
Weighted Average Grant-date Fair Value [Roll Forward]
Nonvested at beginning of period (in dollars per share)	$ 37.49
Granted (in dollars per share)	46.56	$ 35.95	$ 36.47
Vested (in dollars per share)	39.19
Forfeited (in dollars per share)	34.07
Nonvested at end of period (in dollars per share)	$ 41.01	$ 37.49		$ 41.01	$ 41.01
Aggregated fair value of restricted shares	$ 7.1	$ 7.7	$ 7.6
Additional Disclosures [Abstract]
Vested share-based awards withheld to satisfy income tax obligations (in shares)	55,430	75,280
Vested share-based awards withheld to satisfy income tax obligations	$ 2.6	$ 2.7
2017 Director LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	14,316			81,476
2012 Employee LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	155,722				2,144,578
2021 Employee LTIP [Member] | Restricted Stock [Member]
Number of Shares [Roll Forward]
Granted (in shares)	0

XML

SHARE-BASED COMPENSATION, Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Compensation Expense [Abstract]
Total share-based compensation expense	$ 7,114	$ 7,169	$ 7,954
Recognized tax benefit	2,000	2,200	2,200
401 (k) Profit Sharing Plan [Abstract]
Contribution to profit sharing plan	3,400	$ 3,000	$ 2,800
Restricted Stock [Member]
Compensation Expense [Abstract]
Unrecognized compensation expense	$ 8,700
Unrecognized compensation expense, period for recognition	27 months

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INCOME TAXES, Reconciliation of Income taxes Computed at the Statutory Federal Income Tax Rate to Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Reconciliation of income taxes to the statutory rate [Abstract]
Income tax expense computed at the U.S. statutory federal rate	$ 30,845	$ 22,450	$ 20,182
State income tax expense - net of federal benefit	8,937	6,941	5,659
Non-deductible executive compensation	1,749	2,052	613
Other	(247)	1,066	423
Provision for income taxes	$ 41,284	$ 32,509	$ 26,877
Effective income tax rate	28.10%	30.40%	28.00%

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INCOME TAXES, Components of the Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Current [Abstract]
Federal	$ 32,309	$ 26,054	$ 19,367
State	11,681	9,882	9,520
Foreign	894	770	200
Total current expense	44,884	36,706	29,087
Deferred [Abstract]
Federal	(3,289)	(3,067)	(492)
State	(370)	(1,096)	(1,799)
Foreign	59	(34)	81
Total deferred benefit	(3,600)	(4,197)	(2,210)
Provision for income taxes	$ 41,284	$ 32,509	$ 26,877

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INCOME TAXES, Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Deferred tax assets [Abstract]
Accrued vacation	$ 2,391	$ 2,537
Deferred revenue	5,090	4,227
Allowance for credit losses	951	1,048
Restricted stock	616	772
Other deferred tax assets	743	1,552
Accrued bonus	2,532	2,277
Lease liabilities	1,857	2,476
Other credits and carryforwards	249	0
Gross deferred tax assets	14,429	14,889
Less: valuation allowance	(250)	0
Net deferred tax assets	14,179	14,889
Deferred tax liabilities [Abstract]
Property and equipment	(2,295)	(2,391)
Operating leases	(2,759)	(6,948)
Prepaid expenses	(887)	(912)
Right-of-use assets	(1,869)	(2,419)
Tax deductible goodwill	(1,319)	(751)
Total deferred tax liabilities	(9,129)	(13,421)
Net deferred tax asset	$ 5,050	$ 1,468

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FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Assets [Abstract]
Money market funds	$ 18,138	$ 45,134
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets [Abstract]
Money market funds	18,138	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

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BUSINESS COMBINATIONS, Systems Management Planning (SMP) (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Goodwill	$ 126,543	$ 126,645		$ 118,097
Systems Management Planning (SMP) [Member]
Business Combination [Abstract]
Cash portion of the acquisition	29,000
Receivable related to working capital adjustment	$ 2,000
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Accounts receivable			$ 14,526
Other assets			3,344
Identified intangible assets			14,280
Accounts payable and other current liabilities			(11,424)
Performance obligation			(2,020)
Total identifiable net assets			18,706
Goodwill			8,328
Total purchase consideration			$ 27,034
Systems Management Planning (SMP) [Member] | Customer Relationships [Member]
Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed [Abstract]
Estimated useful lives	7 years

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SEGMENT REPORTING, Reportable Segment Information (Details) $ in Thousands	12 Months Ended
	Mar. 31, 2022 USD ($) Segment	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)
SEGMENT REPORTING [Abstract]
Number of business segment | Segment	2
Reportable Segment Information [Abstract]
Net sales	$ 1,821,019	$ 1,568,323	$ 1,588,404
Cost of Sales [Abstract]
Cost of sales	1,360,037	1,174,769	1,197,213
Gross profit	460,982	393,554	391,191
Selling, general, and administrative expenses	297,117	271,263	279,182
Depreciation and amortization	14,646	13,951	14,156
Interest and financing costs	1,903	2,005	2,574
Operating expenses	313,666	287,219	295,912
Operating income	147,316	106,335	95,279
Other income	(432)	571	680
Earnings before tax	146,884	106,906	95,959
Net Sales [Abstract]
Contracts with customers	1,752,935	1,496,473	1,519,096
Financing and other	68,084	71,850	69,308
Net sales	1,821,019	1,568,323	1,588,404
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	24,305	19,991	19,156
Purchases of property, equipment and operating lease equipment	23,182	11,513	7,009
Selected Financial Data - Balance Sheet [Abstract]
Total assets	1,166,203	1,076,775	909,113
Product [Member]
Reportable Segment Information [Abstract]
Net sales	1,580,394	1,366,158	1,395,288
Cost of Sales [Abstract]
Cost of sales	1,210,943	1,049,677	1,076,773
Net Sales [Abstract]
Net sales	1,580,394	1,366,158	1,395,288
Service [Member]
Reportable Segment Information [Abstract]
Net sales	240,625	202,165	193,116
Cost of Sales [Abstract]
Cost of sales	149,094	125,092	120,440
Net Sales [Abstract]
Net sales	240,625	202,165	193,116
Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	1,733,036	1,507,954	1,530,138
Net Sales [Abstract]
Contracts with customers	1,718,093	1,484,104	1,514,507
Financing and other	14,943	23,850	15,631
Net sales	1,733,036	1,507,954	1,530,138
Operating Segments [Member] | Technology Segment [Member]
Reportable Segment Information [Abstract]
Net sales	1,733,036	1,507,954	1,530,138
Cost of Sales [Abstract]
Cost of sales	1,324,883	1,161,719	1,189,550
Gross profit	408,153	346,235	340,588
Selling, general, and administrative expenses	283,690	256,210	264,123
Depreciation and amortization	14,535	13,839	14,016
Interest and financing costs	928	521	294
Operating expenses	299,153	270,570	278,433
Operating income	109,000	75,665	62,155
Net Sales [Abstract]
Contracts with customers	1,718,093	1,484,104	1,514,507
Financing and other	14,943	23,850	15,631
Net sales	1,733,036	1,507,954	1,530,138
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	15,592	14,568	14,516
Purchases of property, equipment and operating lease equipment	4,951	4,752	4,842
Selected Financial Data - Balance Sheet [Abstract]
Total assets	941,743	828,576	709,854
Operating Segments [Member] | Technology Segment [Member] | Product [Member]
Reportable Segment Information [Abstract]
Net sales	1,492,411	1,305,789	1,337,022
Cost of Sales [Abstract]
Cost of sales	1,175,789	1,036,627	1,069,110
Net Sales [Abstract]
Net sales	1,492,411	1,305,789	1,337,022
Operating Segments [Member] | Technology Segment [Member] | Service [Member]
Reportable Segment Information [Abstract]
Net sales	240,625	202,165	193,116
Cost of Sales [Abstract]
Cost of sales	149,094	125,092	120,440
Net Sales [Abstract]
Net sales	240,625	202,165	193,116
Operating Segments [Member] | Financing Segment [Member]
Reportable Segment Information [Abstract]
Net sales	87,983	60,369	58,266
Cost of Sales [Abstract]
Cost of sales	35,154	13,050	7,663
Gross profit	52,829	47,319	50,603
Selling, general, and administrative expenses	13,427	15,053	15,059
Depreciation and amortization	111	112	140
Interest and financing costs	975	1,484	2,280
Operating expenses	14,513	16,649	17,479
Operating income	38,316	30,670	33,124
Net Sales [Abstract]
Contracts with customers	34,842	12,369	4,589
Financing and other	53,141	48,000	53,677
Net sales	87,983	60,369	58,266
Selected Financial Data - Statement of Cash Flow [Abstract]
Depreciation and amortization	8,713	5,423	4,640
Purchases of property, equipment and operating lease equipment	18,231	6,761	2,167
Selected Financial Data - Balance Sheet [Abstract]
Total assets	224,460	248,199	199,259
Operating Segments [Member] | Financing Segment [Member] | Product [Member]
Reportable Segment Information [Abstract]
Net sales	87,983	60,369	58,266
Cost of Sales [Abstract]
Cost of sales	35,154	13,050	7,663
Net Sales [Abstract]
Net sales	87,983	60,369	58,266
Operating Segments [Member] | Financing Segment [Member] | Service [Member]
Reportable Segment Information [Abstract]
Net sales	0	0	0
Cost of Sales [Abstract]
Cost of sales	0	0	0
Net Sales [Abstract]
Net sales	$ 0	$ 0	$ 0

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SEGMENT REPORTING, Technology Segment Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Abstract]
Net sales	$ 1,821,019	$ 1,568,323	$ 1,588,404
Less: Revenue from financing and other	(68,084)	(71,850)	(69,308)
Revenue from contracts with customers	1,752,935	1,496,473	1,519,096
Technology Segment [Member]
Disaggregation of Revenue [Abstract]
Net sales	1,733,036	1,507,954	1,530,138
Less: Revenue from financing and other	(14,943)	(23,850)	(15,631)
Revenue from contracts with customers	1,718,093	1,484,104	1,514,507
Technology Segment [Member] | Technology [Member]
Disaggregation of Revenue [Abstract]
Net sales	250,485	251,683	324,239
Technology Segment [Member] | Telecom, Media & Entertainment [Member]
Disaggregation of Revenue [Abstract]
Net sales	502,408	371,913	289,958
Technology Segment [Member] | Financial Services [Member]
Disaggregation of Revenue [Abstract]
Net sales	155,160	198,761	191,679
Technology Segment [Member] | State and Local Government and Educational Institutions [Member]
Disaggregation of Revenue [Abstract]
Net sales	241,769	245,919	243,092
Technology Segment [Member] | Health Care [Member]
Disaggregation of Revenue [Abstract]
Net sales	270,481	200,067	233,894
Technology Segment [Member] | All others [Member]
Disaggregation of Revenue [Abstract]
Net sales	312,733	239,611	247,276
Technology Segment [Member] | Cisco Systems [Member]
Disaggregation of Revenue [Abstract]
Net sales	672,821	537,041	607,719
Technology Segment [Member] | NetApp [Member]
Disaggregation of Revenue [Abstract]
Net sales	91,948	58,020	59,812
Technology Segment [Member] | HP Inc. & HPE [Member]
Disaggregation of Revenue [Abstract]
Net sales	56,171	59,838	71,802
Technology Segment [Member] | Dell / EMC [Member]
Disaggregation of Revenue [Abstract]
Net sales	148,782	107,336	84,939
Technology Segment [Member] | Arista Networks [Member]
Disaggregation of Revenue [Abstract]
Net sales	44,280	51,789	75,281
Technology Segment [Member] | Juniper Networks [Member]
Disaggregation of Revenue [Abstract]
Net sales	92,965	91,946	68,339
Technology Segment [Member] | All others [Member]
Disaggregation of Revenue [Abstract]
Net sales	$ 626,069	$ 601,984	$ 562,246

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SEGMENT REPORTING, Geographic Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Net Sales [Abstract]
Net sales	$ 1,821,019	$ 1,568,323	$ 1,588,404
Long-lived Tangible Assets [Abstract]
Long-lived tangible assets	22,553	34,435
U.S. [Member]
Net Sales [Abstract]
Net sales	1,716,525	1,476,466	1,508,329
Long-lived Tangible Assets [Abstract]
Long-lived tangible assets	21,837	33,504
Non U.S [Member]
Net Sales [Abstract]
Net sales	104,494	91,857	$ 80,075
Long-lived Tangible Assets [Abstract]
Long-lived tangible assets	$ 716	$ 931

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SEGMENT REPORTING, Concentration Risk (Details)	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Revenue [Member] | Customer Concentration Risk [Member] | Verizon Communications Inc. [Member] | Technology Segment [Member]
Concentration of Risk [Abstract]
Percentage of concentration risk	24.00%	19.00%	15.00%

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Movement in Valuation Allowances and Reserves [Roll Forward]
Expected merchandise returns	$ 7,800	$ 7,400	$ 6,500
Allowance for Sales Returns [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	1,189	1,038	852
Charged to Costs and Expenses	2,158	2,909	2,678
Deductions/Write-Offs	(2,101)	(2,758)	(2,492)
Balance at End of Period	1,246	1,189	1,038
Allowance for Credit Losses [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	4,447	3,189	2,614
Charged to Costs and Expenses	(102)	1,436	1,004
Deductions/Write-Offs	(545)	(178)	(429)
Balance at End of Period	3,800	4,447	3,189
Valuation for Deferred Taxes [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	0	1,385	1,065
Charged to Costs and Expenses	250	0	320
Deductions/Write-Offs	0	(1,385)	0
Balance at End of Period	$ 250	$ 0	$ 1,385