☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 54-1817218 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, | PLUS | NASDAQ Global Select Market |
Large accelerated filer ☒ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Emerging growth company ☐ |
Part I. Financial Information: | ||||||
Item 1. | Financial Statements | |||||
5 | ||||||
6 | ||||||
7 | ||||||
8 | ||||||
10 | ||||||
11 | ||||||
Item 2. | 26 | |||||
Item 3. | ||||||
Item 4. | 44 | |||||
Part II. Other | Information | |||||
Item 1. | ||||||
Item 1A. | 45 | |||||
Item 2. | 45 | |||||
Item 3. | 46 | |||||
Item 4. | 46 | |||||
Item 5. | 46 | |||||
Item 6. | ||||||
Signatures | ||||||
• | 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; |
• | domestic and international economic regulations uncertainty (e.g., tariffs, sanctions, and trade agreements); |
June 30, 2022 | March 31, 2022 | December 31, 2022 | March 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 83,488 | $ | 155,378 | $ | 99,395 | $ | 155,378 | ||||||||
Accounts receivable—trade, net | 482,166 | 430,380 | 674,935 | 430,380 | ||||||||||||
Accounts receivable—other, net | 47,581 | 48,673 | 70,589 | 48,673 | ||||||||||||
Inventories | 246,873 | 155,060 | 244,798 | 155,060 | ||||||||||||
Financing receivables—net, current | 75,170 | 61,492 | 105,823 | 61,492 | ||||||||||||
Deferred costs | 34,104 | 32,555 | 43,111 | 32,555 | ||||||||||||
Other current assets | 15,961 | 13,944 | 54,792 | 13,944 | ||||||||||||
Total current assets | 985,343 | 897,482 | 1,293,443 | 897,482 | ||||||||||||
Financing receivables and operating leases—net | 68,719 | 64,292 | 80,579 | 64,292 | ||||||||||||
Deferred tax asset—net | 5,054 | 5,050 | 4,859 | 5,050 | ||||||||||||
Property, equipment, and other assets | 45,888 | 45,586 | 55,371 | 45,586 | ||||||||||||
Goodwill | 126,378 | 126,543 | 136,057 | 126,543 | ||||||||||||
Other intangible assets—net | 24,768 | 27,250 | 27,556 | 27,250 | ||||||||||||
TOTAL ASSETS | $ | 1,256,150 | $ | 1,166,203 | $ | 1,597,865 | $ | 1,166,203 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
LIABILITIES | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 165,793 | $ | 136,161 | $ | 299,627 | $ | 136,161 | ||||||||
Accounts payable—floor plan | 138,047 | 145,323 | 154,541 | 145,323 | ||||||||||||
Salaries and commissions payable | 32,490 | 39,602 | 41,152 | 39,602 | ||||||||||||
Deferred revenue | 100,637 | 86,469 | 125,570 | 86,469 | ||||||||||||
Recourse notes payable—current | 47,529 | 7,316 | 102,961 | 7,316 | ||||||||||||
Non-recourse notes payable—current | 19,873 | 17,070 | 41,293 | 17,070 | ||||||||||||
Other current liabilities | 29,603 | 28,095 | 28,433 | 28,095 | ||||||||||||
Total current liabilities | 533,972 | 460,036 | 793,577 | 460,036 | ||||||||||||
Recourse notes payable - long-term | 3,878 | 5,792 | - | 5,792 | ||||||||||||
Non-recourse notes payable - long-term | 6,569 | 4,108 | 7,172 | 4,108 | ||||||||||||
Other liabilities | 35,443 | 35,529 | 50,696 | 35,529 | ||||||||||||
TOTAL LIABILITIES | 579,862 | 505,465 | 851,445 | 505,465 | ||||||||||||
COMMITMENTS AND CONTINGENCIES (Note 8) | ||||||||||||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||
Preferred stock, $0.01 per share par value; 2,000 shares authorized; NaN outstanding | 0 | 0 | ||||||||||||||
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,893 outstanding at June 30, 2022 and 26,886 outstanding at March 31, 2022 | 271 | 270 | ||||||||||||||
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; 26,907 outstanding at December 31, 2022 and 26,886 outstanding at March 31, 2022 | 272 | 270 | ||||||||||||||
Additional paid-in capital | 161,253 | 159,480 | 165,161 | 159,480 | ||||||||||||
Treasury stock, at cost, 258 shares at June 30, 2022 and 130 shares at March 31, 2022 | (13,958 | ) | (6,734 | ) | ||||||||||||
Treasury stock, at cost, 258 shares at December 31, 2022 and 130 shares at March 31, 2022 | (13,958 | ) | (6,734 | ) | ||||||||||||
Retained earnings | 530,185 | 507,846 | 594,348 | 507,846 | ||||||||||||
Accumulated other comprehensive income—foreign currency translation adjustment | (1,463 | ) | (124 | ) | 597 | (124 | ) | |||||||||
Total Stockholders’ Equity | 676,288 | 660,738 | 746,420 | 660,738 | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,256,150 | $ | 1,166,203 | $ | 1,597,865 | $ | 1,166,203 |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net sales | ||||||||||||||||||||||||
Product | $ | 395,250 | $ | 361,057 | $ | 556,018 | $ | 432,307 | $ | 1,379,813 | $ | 1,190,524 | ||||||||||||
Services | 63,109 | 55,592 | 67,458 | 62,527 | 195,728 | 178,976 | ||||||||||||||||||
Total | 458,359 | 416,649 | 623,476 | 494,834 | 1,575,541 | 1,369,500 | ||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||
Product | 304,210 | 277,227 | 441,015 | 339,810 | 1,062,352 | 914,666 | ||||||||||||||||||
Services | 40,626 | 33,910 | 44,089 | 37,907 | 127,990 | 109,203 | ||||||||||||||||||
Total | 344,836 | 311,137 | 485,104 | 377,717 | 1,190,342 | 1,023,869 | ||||||||||||||||||
Gross profit | 113,523 | 105,512 | 138,372 | 117,117 | 385,199 | 345,631 | ||||||||||||||||||
Selling, general, and administrative | 76,767 | 68,775 | 86,730 | 76,874 | 248,201 | 220,153 | ||||||||||||||||||
Depreciation and amortization | 3,210 | 3,926 | 3,609 | 3,597 | 10,387 | 11,376 | ||||||||||||||||||
Interest and financing costs | 363 | 359 | 1,575 | 561 | 2,863 | 1,262 | ||||||||||||||||||
Operating expenses | 80,340 | 73,060 | 91,914 | 81,032 | 261,451 | 232,791 | ||||||||||||||||||
Operating income | 33,183 | 32,452 | 46,458 | 36,085 | 123,748 | 112,840 | ||||||||||||||||||
Other income (expense) | (2,153 | ) | 123 | |||||||||||||||||||||
Other income (expense), net | 2,907 | (175 | ) | (3,112 | ) | (377 | ) | |||||||||||||||||
Earnings before tax | 31,030 | 32,575 | 49,365 | 35,910 | 120,636 | 112,463 | ||||||||||||||||||
Provision for income taxes | 8,691 | 9,057 | 13,671 | 9,486 | 34,134 | 31,108 | ||||||||||||||||||
Net earnings | $ | 22,339 | $ | 23,518 | $ | 35,694 | $ | 26,424 | $ | 86,502 | $ | 81,355 | ||||||||||||
Net earnings per common share—basic | $ | 0.84 | $ | 0.88 | $ | 1.34 | $ | 0.99 | $ | 3.26 | $ | 3.05 | ||||||||||||
Net earnings per common share—diluted | $ | 0.84 | $ | 0.87 | $ | 1.34 | $ | 0.98 | $ | 3.24 | $ | 3.03 | ||||||||||||
Weighted average common shares outstanding—basic | 26,513 | 26,666 | 26,592 | 26,668 | 26,561 | 26,666 | ||||||||||||||||||
Weighted average common shares outstanding—diluted | 26,685 | 26,882 | 26,648 | 26,930 | 26,688 | 26,887 |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
NET EARNINGS | $ | 22,339 | $ | 23,518 | $ | 35,694 | $ | 26,424 | $ | 86,502 | $ | 81,355 | ||||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||||||||||||||||||||||
Foreign currency translation adjustments | (1,339 | ) | 66 | 3,131 | 81 | 721 | (359 | ) | ||||||||||||||||
Other comprehensive income (loss) | (1,339 | ) | 66 | 3,131 | 81 | 721 | (359 | ) | ||||||||||||||||
TOTAL COMPREHENSIVE INCOME | $ | 21,000 | $ | 23,584 | $ | 38,825 | $ | 26,505 | $ | 87,223 | $ | 80,996 |
Three Months Ended June 30, | Nine Months Ended December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net earnings | $ | 22,339 | $ | 23,518 | $ | 86,502 | $ | 81,355 | ||||||||
Adjustments to reconcile net earnings to net cash used in operating activities: | ||||||||||||||||
Depreciation and amortization | 4,472 | 6,082 | 14,248 | 18,620 | ||||||||||||
Provision for credit losses | 698 | (261 | ) | 2,846 | 77 | |||||||||||
Share-based compensation expense | 1,773 | 1,735 | 5,681 | 5,355 | ||||||||||||
Deferred taxes | 195 | (504 | ) | |||||||||||||
Payments from lessees directly to lenders—operating leases | 0 | (32 | ) | - | (32 | ) | ||||||||||
Gain on disposal of property, equipment, and operaing lease equipment | (224 | ) | (148 | ) | ||||||||||||
Gain on disposal of property, equipment, and operating lease equipment | (3,201 | ) | (855 | ) | ||||||||||||
Changes in: | ||||||||||||||||
Accounts receivable | (53,556 | ) | (68,641 | ) | (266,470 | ) | (132,228 | ) | ||||||||
Inventories-net | (92,678 | ) | (7,800 | ) | (90,205 | ) | (77,921 | ) | ||||||||
Financing receivables—net | (20,574 | ) | 193 | (47,442 | ) | (20,296 | ) | |||||||||
Deferred costs and other assets | (4,177 | ) | 61 | (60,804 | ) | (12,432 | ) | |||||||||
Accounts payable-trade | 30,376 | (15,393 | ) | 156,283 | 526 | |||||||||||
Salaries and commissions payable, deferred revenue, and other liabilities | 8,608 | (4,450 | ) | 55,329 | 16,793 | |||||||||||
Net cash used in operating activities | (102,943 | ) | (65,136 | ) | (147,038 | ) | (121,542 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds from sale of property, equipment, and operating lease equipment | 85 | 843 | 3,325 | 2,927 | ||||||||||||
Purchases of property, equipment and operating lease equipment | (1,777 | ) | (6,994 | ) | (5,661 | ) | (21,375 | ) | ||||||||
Cash used in acquisitions, net of cash acquired | (13,288 | ) | - | |||||||||||||
Net cash used in investing activities | (1,692 | ) | (6,151 | ) | (15,624 | ) | (18,448 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Borrowings of non-recourse and recourse notes payable | 49,256 | 3,199 | 189,063 | 98,547 | ||||||||||||
Repayments of non-recourse and recourse notes payable | (3,645 | ) | (4,819 | ) | (87,502 | ) | (32,099 | ) | ||||||||
Repurchase of common stock | (7,224 | ) | (3,807 | ) | (7,224 | ) | (9,466 | ) | ||||||||
Net borrowings (repayments) on floor plan facility | (7,276 | ) | 40,921 | |||||||||||||
Net borrowings on floor plan facility | 9,218 | 59,014 | ||||||||||||||
Net cash provided by financing activities | 31,111 | 35,494 | 103,555 | 115,996 | ||||||||||||
Effect of exchange rate changes on cash | 1,634 | 71 | 3,124 | (2 | ) | |||||||||||
Net increase in cash and cash equivalents | (71,890 | ) | (35,722 | ) | ||||||||||||
Net decrease in cash and cash equivalents | (55,983 | ) | (23,996 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | 155,378 | 129,562 | 155,378 | 129,562 | ||||||||||||
Cash and cash equivalents, end of period | $ | 83,488 | $ | 93,840 | $ | 99,395 | $ | 105,566 |
Three Months Ended June 30, | Nine Months Ended December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for interest | $ | 341 | $ | 519 | $ | 2,402 | $ | 1,182 | ||||||||
Cash paid for income taxes | $ | 7,532 | $ | 7,275 | $ | 39,693 | $ | 35,676 | ||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | 1,226 | $ | 1,182 | $ | 3,374 | $ | 3,420 | ||||||||
Schedule of non-cash investing and financing activities: | ||||||||||||||||
Proceeds from sale of property, equipment, and leased equipment | $ | 183 | $ | 978 | $ | 34 | $ | 87 | ||||||||
Purchases of property, equipment, and operating lease equipment | $ | (63 | ) | $ | (2,619 | ) | $ | (125 | ) | $ | (16 | ) | ||||
Borrowing of non-recourse and recourse notes payable | $ | 7,267 | $ | 0 | $ | 38,267 | $ | 56,240 | ||||||||
Repayments of non-recourse and recourse notes payable | $ | 0 | $ | (32 | ) | $ | - | $ | (32 | ) | ||||||
Vesting of share-based compensation | $ | 9,215 | $ | 7,493 | $ | 9,854 | $ | 8,439 | ||||||||
Repurchase of common stock | $ | 0 | $ | (304 | ) | |||||||||||
New operating lease assets obtained in exchange for lease obligations | $ | 34 | $ | 0 | $ | 3,348 | $ | 2,489 |
Three Months Ended June 30, 2022 | Nine Months Ended December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Treasury | Retained | Accumulated Other Comprehensive | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | Additional | Other | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | 26,886 | $ | 270 | $ | 159,480 | $ | (6,734 | ) | $ | 507,846 | $ | (124 | ) | $ | 660,738 | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-In | Treasury | Retained | Comprehensive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | 26,886 | $ | 270 | $ | 159,480 | $ | (6,734 | ) | $ | 507,846 | $ | (124 | ) | $ | 660,738 | |||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 135 | 1 | 0 | 0 | 0 | 0 | 1 | 135 | 1 | - | - | - | - | 1 | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 0 | 0 | 1,773 | 0 | 0 | 0 | 1,773 | - | - | 1,773 | - | - | - | 1,773 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (128 | ) | 0 | 0 | (7,224 | ) | 0 | 0 | (7,224 | ) | (128 | ) | - | - | (7,224 | ) | - | - | (7,224 | ) | ||||||||||||||||||||||||||||||||||||
Net earnings | - | 0 | 0 | 0 | 22,339 | 0 | 22,339 | - | - | - | - | 22,339 | - | 22,339 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | 0 | 0 | 0 | 0 | (1,339 | ) | (1,339 | ) | - | - | - | - | - | (1,339 | ) | (1,339 | ) | ||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 26,893 | $ | 271 | $ | 161,253 | $ | (13,958 | ) | $ | 530,185 | $ | (1,463 | ) | $ | 676,288 | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 26,893 | $ | 271 | $ | 161,253 | $ | (13,958 | ) | $ | 530,185 | $ | (1,463 | ) | $ | 676,288 | |||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 13 | 1 | - | - | - | - | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,958 | - | - | - | 1,958 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 28,469 | - | 28,469 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (1,071 | ) | (1,071 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | 26,906 | $ | 272 | $ | 163,211 | $ | (13,958 | ) | $ | 558,654 | $ | (2,534 | ) | $ | 705,645 | |||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 1 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,950 | - | - | - | 1,950 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 35,694 | - | 35,694 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 3,131 | 3,131 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | 26,907 | $ | 272 | $ | 165,161 | $ | (13,958 | ) | $ | 594,348 | $ | 597 | $ | 746,420 |
Three Months Ended June 30, 2021 | Nine Months Ended December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Treasury | Retained | Accumulated Other Comprehensive | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | Additional | Other | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | 27,006 | $ | 145 | $ | 152,366 | $ | (75,372 | ) | $ | 484,616 | $ | 655 | $ | 562,410 | ||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-In | Treasury | Retained | Comprehensive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | 27,006 | $ | 145 | $ | 152,366 | $ | (75,372 | ) | $ | 484,616 | $ | 655 | $ | 562,410 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 156 | 1 | 0 | 0 | 0 | 0 | 1 | 156 | 1 | - | - | - | - | 1 | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 0 | 0 | 1,735 | 0 | 0 | 0 | 1,735 | - | - | 1,735 | - | - | - | 1,735 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (90 | ) | 0 | 0 | (4,111 | ) | 0 | 0 | (4,111 | ) | (90 | ) | - | - | (4,111 | ) | - | - | (4,111 | ) | ||||||||||||||||||||||||||||||||||||
Net earnings | - | 0 | 0 | 0 | 23,518 | 0 | 23,518 | - | - | - | - | 23,518 | - | 23,518 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | 0 | 0 | 0 | 0 | 66 | 66 | - | - | - | - | - | 66 | 66 | ||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | 27,072 | $ | 146 | $ | 154,101 | $ | (79,483 | ) | $ | 508,134 | $ | 721 | $ | 583,619 | ||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | 27,072 | $ | 146 | $ | 154,101 | $ | (79,483 | ) | $ | 508,134 | $ | 721 | $ | 583,619 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 12 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,840 | - | - | - | 1,840 | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (63 | ) | - | - | (2,763 | ) | - | - | (2,763 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 31,413 | - | 31,413 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (506 | ) | (506 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | 27,021 | $ | 146 | $ | 155,941 | $ | (82,246 | ) | $ | 539,547 | $ | 215 | $ | 613,603 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | (5 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,780 | - | - | - | 1,780 | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (50 | ) | - | - | (2,592 | ) | - | - | (2,592 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Stock split effected in the form of a dividend | - | 135 | - | - | (135 | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | - | (11 | ) | - | 82,246 | (82,235 | ) | - | - | |||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 26,424 | - | 26,424 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 81 | 81 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | 26,966 | $ | 270 | $ | 157,721 | $ | (2,592 | ) | $ | 483,601 | $ | 296 | $ | 639,296 |
1. | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | RECENT ACCOUNTING PRONOUNCEMENTS |
REVENUES |
June 30, 2022 | March 31, 2022 | December 31, 2022 | March 31, 2022 | |||||||||||||
Current (included in deferred revenue) | $ | 100,092 | $ | 85,826 | $ | 125,532 | $ | 85,826 | ||||||||
Non-current (included in other liabilities) | $ | 30,574 | $ | 30,086 | $ | 42,634 | $ | 30,086 |
Remainder of the year ending March 31, 2023 | $ | 43,194 | $ | 24,466 | ||||
Year ending March 31, 2024 | 24,954 | 45,891 | ||||||
Year ending March 31, 2025 | 9,466 | 21,815 | ||||||
Year ending March 31, 2026 | 2,510 | 8,191 | ||||||
Year ending March 31, 2027 and thereafter | 986 | 4,741 | ||||||
Total remaining performance obligations | $ | 81,110 | $ | 105,104 |
FINANCING RECEIVABLES AND OPERATING LEASES |
Three months ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net sales | $ | 4,983 | $ | 3,817 | $ | 5,916 | $ | 3,212 | $ | 15,405 | $ | 12,991 | ||||||||||||
Cost of sales | 4,067 | 3,365 | 4,949 | 2,645 | 12,785 | 10,936 | ||||||||||||||||||
Gross profit | $ | 916 | $ | 452 | $ | 967 | $ | 567 | $ | 2,620 | $ | 2,055 |
Three months ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Interest income on sales-type leases | $ | 861 | $ | 1,290 | $ | 996 | $ | 786 | $ | 2,677 | $ | 3,076 | ||||||||||||
Lease income on operating leases | $ | 4,582 | $ | 5,210 | $ | 4,030 | $ | 7,356 | $ | 13,271 | $ | 19,200 |
June 30, 2022 | Notes Receivable | Lease Receivables | Financing Receivables | |||||||||||||||||||||
Notes | Lease | Financing | ||||||||||||||||||||||
December 31, 2022 | Receivable | Receivables | Receivables | |||||||||||||||||||||
Gross receivables | $ | 88,178 | $ | 51,103 | $ | 139,281 | $ | 136,293 | $ | 55,413 | $ | 191,706 | ||||||||||||
Unguaranteed residual value (1) | 0 | 9,233 | 9,233 | - | 7,969 | 7,969 | ||||||||||||||||||
Unearned income | (3,346 | ) | (4,996 | ) | (8,342 | ) | (7,720 | ) | (7,815 | ) | (15,535 | ) | ||||||||||||
Allowance for credit losses (2) | (792 | ) | (913 | ) | (1,705 | ) | (1,252 | ) | (1,397 | ) | (2,649 | ) | ||||||||||||
Total, net | $ | 84,040 | $ | 54,427 | $ | 138,467 | $ | 127,321 | $ | 54,170 | $ | 181,491 | ||||||||||||
Reported as: | ||||||||||||||||||||||||
Current | $ | 52,547 | $ | 22,623 | $ | 75,170 | $ | 84,729 | $ | 21,094 | $ | 105,823 | ||||||||||||
Long-term | 31,493 | 31,804 | 63,297 | 42,592 | 33,076 | 75,668 | ||||||||||||||||||
Total, net | $ | 84,040 | $ | 54,427 | $ | 138,467 | $ | 127,321 | $ | 54,170 | $ | 181,491 |
(1) | Includes unguaranteed residual values of |
(2) | Refer to Note |
Notes | Lease | Financing | ||||||||||||||||||||||
March 31, 2022 | Notes Receivable | Lease Receivables | Financing Receivables | Receivable | Receivables | Receivables | ||||||||||||||||||
Gross receivables | $ | 80,517 | $ | 38,788 | $ | 119,305 | $ | 80,517 | $ | 38,788 | $ | 119,305 | ||||||||||||
Unguaranteed residual value (1) | 0 | 9,141 | 9,141 | - | 9,141 | 9,141 | ||||||||||||||||||
Unearned income | (2,728 | ) | (3,604 | ) | (6,332 | ) | (2,728 | ) | (3,604 | ) | (6,332 | ) | ||||||||||||
Allowance for credit losses (2) | (708 | ) | (681 | ) | (1,389 | ) | (708 | ) | (681 | ) | (1,389 | ) | ||||||||||||
Total, net | $ | 77,081 | $ | 43,644 | $ | 120,725 | $ | 77,081 | $ | 43,644 | $ | 120,725 | ||||||||||||
Reported as: | ||||||||||||||||||||||||
Current | $ | 45,415 | $ | 16,077 | $ | 61,492 | $ | 45,415 | $ | 16,077 | $ | 61,492 | ||||||||||||
Long-term | 31,666 | 27,567 | 59,233 | 31,666 | 27,567 | 59,233 | ||||||||||||||||||
Total, net | $ | 77,081 | $ | 43,644 | $ | 120,725 | $ | 77,081 | $ | 43,644 | $ | 120,725 |
(1) | Includes unguaranteed residual values of $6,424 |
(2) | Refer to Note |
June 30, 2022 | March 31, 2022 | |||||||
Cost of equipment under operating leases | $ | 14,322 | $ | 13,044 | ||||
Accumulated depreciation | (8,900 | ) | (7,985 | ) | ||||
Investment in operating lease equipment—net (1) | $ | 5,422 | $ | 5,059 |
December 31, | March 31, | |||||||
2022 | 2022 | |||||||
Cost of equipment under operating leases | $ | 15,253 | $ | 13,044 | ||||
Accumulated depreciation | (10,342 | ) | (7,985 | ) | ||||
Operating lease equipment—net | $ | 4,911 | $ | 5,059 |
LESSEE ACCOUNTING |
GOODWILL AND OTHER INTANGIBLE ASSETS |
Three months ended June 30, 2022 | Nine Months Ended December 31, | |||||||||||||||||||||||
Goodwill | Accumulated Impairment Loss | Net Carrying Amount | Goodwill | Accumulated Impairment Loss | Net Carrying Amount | |||||||||||||||||||
Beginning balance | $ | 135,216 | $ | (8,673 | ) | $ | 126,543 | $ | 135,216 | $ | (8,673 | ) | $ | 126,543 | ||||||||||
Acquisitions | 9,694 | - | 9,694 | |||||||||||||||||||||
Foreign currency translations | (165 | ) | - | (165 | ) | (180 | ) | - | (180 | ) | ||||||||||||||
Ending balance | $ | 135,051 | $ | (8,673 | ) | $ | 126,378 | $ | 144,730 | $ | (8,673 | ) | $ | 136,057 |
June 30, 2022 | March 31, 2022 | December 31, 2022 | March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||||
Customer relationships & other intangibles | $ | 77,041 | $ | (54,101 | ) | $ | 22,940 | $ | 77,224 | $ | (52,087 | ) | $ | 25,137 | ||||||||||||||||||||||||||||||||||
Purchased intangibles | $ | 85,394 | $ | (59,095 | ) | $ | 26,299 | $ | 77,224 | $ | (52,087 | ) | $ | 25,137 | ||||||||||||||||||||||||||||||||||
Capitalized software development | 10,517 | (8,689 | ) | 1,828 | 10,517 | (8,404 | ) | 2,113 | 10,516 | (9,259 | ) | 1,257 | 10,517 | (8,404 | ) | 2,113 | ||||||||||||||||||||||||||||||||
Total | $ | 87,558 | $ | (62,790 | ) | $ | 24,768 | $ | 87,741 | $ | (60,491 | ) | $ | 27,250 | $ | 95,910 | $ | (68,354 | ) | $ | 27,556 | $ | 87,741 | $ | (60,491 | ) | $ | 27,250 |
ALLOWANCE FOR CREDIT LOSSES |
Accounts Receivable | Notes Receivable | Lease Receivables | Total | |||||||||||||
Balance April 1, 2022 | $ | 2,411 | $ | 708 | $ | 681 | $ | 3,800 | ||||||||
Provision for credit losses | 382 | 84 | 232 | 698 | ||||||||||||
Write-offs and other | (65 | ) | 0 | 0 | (65 | ) | ||||||||||
Balance June 30, 2022 | $ | 2,728 | $ | 792 | $ | 913 | $ | 4,433 |
Accounts Receivable | Notes Receivable | Lease Receivables | Total | |||||||||||||
Balance April 1, 2021 | $ | 2,064 | $ | 1,212 | $ | 1,171 | $ | 4,447 | ||||||||
Provision for credit losses | (40 | ) | 77 | (298 | ) | (261 | ) | |||||||||
Write-offs and other | (22 | ) | 0 | 0 | (22 | ) | ||||||||||
Balance June 30, 2021 | $ | 2,002 | $ | 1,289 | $ | 873 | $ | 4,164 |
Accounts Receivable | Notes Receivable | Lease Receivables | Total | |||||||||||||
Balance April 1, 2022 | $ | 2,411 | $ | 708 | $ | 681 | $ | 3,800 | ||||||||
Provision for credit losses | 1,584 | 546 | 716 | 2,846 | ||||||||||||
Write-offs and other | (102 | ) | (2 | ) | - | (104 | ) | |||||||||
Balance December 31, 2022 | $ | 3,893 | $ | 1,252 | $ | 1,397 | $ | 6,542 |
Accounts Receivable | Notes Receivable | Lease Receivables | Total | |||||||||||||
Balance April 1, 2021 | $ | 2,064 | $ | 1,212 | $ | 1,171 | $ | 4,447 | ||||||||
Provision for credit losses | 330 | 60 | (313 | ) | 77 | |||||||||||
Write-offs and other | (129 | ) | (112 | ) | (212 | ) | (453 | ) | ||||||||
Balance December 31, 2021 | $ | 2,265 | $ | 1,160 | $ | 646 | $ | 4,071 |
• | 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 |
• | 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 |
Amortized cost basis by origination year ending March 31, | Amortized cost basis by origination year ending March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | 2018 | Total | Non-recourse debt (2) | Net credit exposure | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | Total | Non-recourse debt (2) | Net credit exposure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes receivable: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 22,785 | $ | 18,879 | $ | 24,314 | $ | 969 | $ | 158 | $ | 3 | $ | 67,108 | $ | (24,331 | ) | $ | 42,777 | $ | 81,348 | $ | 11,930 | $ | 14,385 | $ | 541 | $ | 38 | $ | - | $ | 108,242 | $ | - | $ | 108,242 | |||||||||||||||||||||||||||||||||||
Average CQR | 7,471 | 6,784 | 2,671 | 746 | 52 | 0 | 17,724 | (8,280 | ) | 9,444 | 16,107 | 2,899 | 1,107 | 176 | 41 | 1 | 20,331 | (45 | ) | 20,286 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 30,256 | $ | 25,663 | $ | 26,985 | $ | 1,715 | $ | 210 | $ | 3 | $ | 84,832 | $ | (32,611 | ) | $ | 52,221 | $ | 97,455 | $ | 14,829 | $ | 15,492 | $ | 717 | $ | 79 | $ | 1 | $ | 128,573 | $ | (45 | ) | $ | 128,528 | ||||||||||||||||||||||||||||||||||
Lease receivables: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 14,828 | $ | 9,539 | $ | 4,209 | $ | 1,809 | $ | 731 | $ | 44 | $ | 31,160 | $ | (3,531 | ) | $ | 27,629 | $ | 14,794 | $ | 5,037 | $ | 2,445 | $ | 1,269 | $ | 175 | $ | 20 | $ | 23,740 | $ | (35,202 | ) | $ | (11,462 | ) | |||||||||||||||||||||||||||||||||
Average CQR | 6,654 | 9,029 | 2,334 | 473 | 39 | 44 | 18,573 | (188 | ) | 18,385 | 19,471 | 6,898 | 1,122 | 175 | 15 | 16 | 27,697 | (1,084 | ) | 26,613 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 21,482 | $ | 18,568 | $ | 6,543 | $ | 2,282 | $ | 770 | $ | 88 | $ | 49,733 | $ | (3,719 | ) | $ | 46,014 | $ | 34,265 | $ | 11,935 | $ | 3,567 | $ | 1,444 | $ | 190 | $ | 36 | $ | 51,437 | $ | (36,286 | ) | $ | 15,151 | ||||||||||||||||||||||||||||||||||
Total amortized cost (1) | $ | 51,738 | $ | 44,231 | $ | 33,528 | $ | 3,997 | $ | 980 | $ | 91 | $ | 134,565 | $ | (36,330 | ) | $ | 98,235 | $ | 131,720 | $ | 26,764 | $ | 19,059 | $ | 2,161 | $ | 269 | $ | 37 | $ | 180,010 | $ | (36,331 | ) | $ | 143,679 |
(1) | Unguaranteed residual values of $ |
(2) | Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis. |
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 | 0 | 12,872 | (4,763 | ) | 8,109 | ||||||||||||||||||||||||||
Low CQR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
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 | 0 | 14,888 | (347 | ) | 14,541 | ||||||||||||||||||||||||||
Low CQR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
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 |
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 |
(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. |
31-60 Days Past Due | 61-90 Days Past Due | > 90 Days Past Due | Total Past Due | Current | Total Billed | Unbilled | Amortized Cost | 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 | $ | 268 | $ | 425 | $ | 97 | $ | 790 | $ | 5,623 | $ | 6,413 | $ | 78,419 | $ | 84,832 | $ | 899 | $ | 215 | $ | 1,310 | $ | 2,424 | $ | 7,303 | $ | 9,727 | $ | 118,846 | $ | 128,573 | ||||||||||||||||||||||||||||||||
Lease receivables | 240 | 154 | 551 | 945 | 905 | 1,850 | 47,883 | 49,733 | 280 | 370 | 423 | 1,073 | 5,968 | 7,041 | 44,396 | 51,437 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 508 | $ | 579 | $ | 648 | $ | 1,735 | $ | 6,528 | $ | 8,263 | $ | 126,302 | $ | 134,565 | $ | 1,179 | $ | 585 | $ | 1,733 | $ | 3,497 | $ | 13,271 | $ | 16,768 | $ | 163,242 | $ | 180,010 |
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 |
CREDIT FACILITY AND NOTES PAYABLE |
COMMITMENTS AND CONTINGENCIES |
EARNINGS PER SHARE |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net earnings attributable to common shareholders - basic and diluted | $ | 22,339 | $ | 23,518 | ||||
Basic and diluted common shares outstanding: | ||||||||
Weighted average common shares outstanding — basic | 26,513 | 26,666 | ||||||
Effect of dilutive shares | 172 | 216 | ||||||
Weighted average shares common outstanding — diluted | 26,685 | 26,882 | ||||||
Earnings per common share - basic | $ | 0.84 | $ | 0.88 | ||||
Earnings per common share - diluted | $ | 0.84 | $ | 0.87 |
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net earnings attributable to common shareholders - basic and diluted | $ | 35,694 | $ | 26,424 | $ | 86,502 | $ | 81,355 | ||||||||
Basic and diluted common shares outstanding: | ||||||||||||||||
Weighted average common shares outstanding — basic | 26,592 | 26,668 | 26,561 | 26,666 | ||||||||||||
Effect of dilutive shares | 56 | 262 | 127 | 221 | ||||||||||||
Weighted average shares common outstanding — diluted | 26,648 | 26,930 | 26,688 | 26,887 | ||||||||||||
Earnings per common share - basic | $ | 1.34 | $ | 0.99 | $ | 3.26 | $ | 3.05 | ||||||||
Earnings per common share - diluted | $ | 1.34 | $ | 0.98 | $ | 3.24 | $ | 3.03 |
STOCKHOLDERS’ EQUITY |
SHARE-BASED COMPENSATION |
Number of Shares | Weighted Average Grant-date Fair Value | Number of Shares | Weighted Average Grant-date Fair Value | |||||||||||||
Nonvested April 1, 2022 | 343,806 | $ | 41.01 | 343,806 | $ | 41.01 | ||||||||||
Granted | 139,417 | $ | 58.51 | 157,485 | $ | 56.57 | ||||||||||
Vested | (163,034 | ) | $ | 39.25 | (178,374 | ) | $ | 39.46 | ||||||||
Forfeited | (4,382 | ) | $ | 40.77 | (7,843 | ) | $ | 41.91 | ||||||||
Nonvested June 30, 2022 | 315,807 | $ | 49.65 | |||||||||||||
Nonvested December 31, 2022 | 315,074 | $ | 49.57 |
INCOME TAXES |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
Fair Value Measurement Using | 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) | Recorded Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs(Level 3) | |||||||||||||||||||||||||
June 30, 2022 | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 23,193 | $ | 23,193 | $ | 0 | $ | 0 | $ | 255 | $ | 255 | $ | - | $ | - | ||||||||||||||||
March 31, 2022 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 18,138 | $ | 18,138 | $ | 0 | $ | 0 | $ | 18,138 | $ | 18,138 | $ | - | $ | - |
BUSINESS COMBINATIONS |
Acquisition Date Amount | ||||
Accounts receivable | $ | 4,033 | ||
Other assets | 129 | |||
Identified intangible assets | 8,360 | |||
Accounts payable and other liabilities | (8,714 | ) | ||
Contract liabilities | (214 | ) | ||
Total identifiable net assets | 3,594 | |||
Goodwill | 9,694 | |||
Total purchase consideration | $ | 13,288 |
SEGMENT REPORTING |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||||||||||||||||||||
Net Sales | ||||||||||||||||||||||||||||||||||||||||||||||||
Product | $ | 385,676 | $ | 9,574 | $ | 395,250 | $ | 344,766 | $ | 16,291 | $ | 361,057 | $ | 544,316 | $ | 11,702 | $ | 556,018 | $ | 414,448 | $ | 17,859 | $ | 432,307 | ||||||||||||||||||||||||
Service | 63,109 | 0 | 63,109 | 55,592 | 0 | 55,592 | 67,458 | - | 67,458 | 62,527 | - | 62,527 | ||||||||||||||||||||||||||||||||||||
Total | 448,785 | 9,574 | 458,359 | 400,358 | 16,291 | 416,649 | 611,774 | 11,702 | 623,476 | 476,975 | 17,859 | 494,834 | ||||||||||||||||||||||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||||||||||||||||||||||||||
Product | 302,508 | 1,702 | 304,210 | 271,015 | 6,212 | 277,227 | 439,831 | 1,184 | 441,015 | 334,585 | 5,225 | 339,810 | ||||||||||||||||||||||||||||||||||||
Service | 40,626 | 0 | 40,626 | 33,910 | 0 | 33,910 | 44,089 | - | 44,089 | 37,907 | - | 37,907 | ||||||||||||||||||||||||||||||||||||
Total | 343,134 | 1,702 | 344,836 | 304,925 | 6,212 | 311,137 | 483,920 | 1,184 | 485,104 | 372,492 | 5,225 | 377,717 | ||||||||||||||||||||||||||||||||||||
Gross Profit | 105,651 | 7,872 | 113,523 | 95,433 | 10,079 | 105,512 | 127,854 | 10,518 | 138,372 | 104,483 | 12,634 | 117,117 | ||||||||||||||||||||||||||||||||||||
Selling, general, and administrative | 73,112 | 3,655 | 76,767 | 66,153 | 2,622 | 68,775 | 81,874 | 4,856 | 86,730 | 73,413 | 3,461 | 76,874 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 3,182 | 28 | 3,210 | 3,898 | 28 | 3,926 | 3,582 | 27 | 3,609 | 3,569 | 28 | 3,597 | ||||||||||||||||||||||||||||||||||||
Interest and financing costs | 138 | 225 | 363 | 159 | 200 | 359 | 1,308 | 267 | 1,575 | 335 | 226 | 561 | ||||||||||||||||||||||||||||||||||||
Operating expenses | 76,432 | 3,908 | 80,340 | 70,210 | 2,850 | 73,060 | 86,764 | 5,150 | 91,914 | 77,317 | 3,715 | 81,032 | ||||||||||||||||||||||||||||||||||||
Operating income | 29,219 | 3,964 | 33,183 | 25,223 | 7,229 | 32,452 | 41,090 | 5,368 | 46,458 | 27,166 | 8,919 | 36,085 | ||||||||||||||||||||||||||||||||||||
Other income (expense) | (2,153 | ) | 123 | |||||||||||||||||||||||||||||||||||||||||||||
Other income (expense), net | 2,907 | (175 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Earnings before tax | $ | 31,030 | $ | 32,575 | $ | 49,365 | $ | 35,910 | ||||||||||||||||||||||||||||||||||||||||
Net Sales | ||||||||||||||||||||||||||||||||||||||||||||||||
Contracts with customers | $ | 443,802 | $ | 945 | $ | 444,747 | $ | 396,541 | $ | 5,418 | $ | 401,959 | $ | 605,858 | $ | 560 | $ | 606,418 | $ | 473,763 | $ | 5,840 | $ | 479,603 | ||||||||||||||||||||||||
Financing and other | 4,983 | 8,629 | 13,612 | 3,817 | 10,873 | 14,690 | 5,916 | 11,142 | 17,058 | 3,212 | 12,019 | 15,231 | ||||||||||||||||||||||||||||||||||||
Total | $ | 448,785 | $ | 9,574 | $ | 458,359 | $ | 400,358 | $ | 16,291 | $ | 416,649 | $ | 611,774 | $ | 11,702 | $ | 623,476 | $ | 476,975 | $ | 17,859 | $ | 494,834 | ||||||||||||||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 3,515 | $ | 957 | $ | 4,472 | $ | 4,103 | $ | 1,979 | $ | 6,082 | $ | 3,926 | $ | 783 | $ | 4,709 | $ | 3,846 | $ | 2,730 | $ | 6,576 | ||||||||||||||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 1,286 | $ | 491 | $ | 1,777 | $ | 1,307 | $ | 5,687 | $ | 6,994 | $ | 2,225 | $ | 1,026 | $ | 3,251 | $ | 1,339 | $ | 3,793 | $ | 5,132 | ||||||||||||||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,007,898 | $ | 248,252 | $ | 1,256,150 | $ | 868,276 | $ | 209,140 | $ | 1,077,416 | $ | 1,301,459 | $ | 296,406 | $ | 1,597,865 | $ | 998,594 | $ | 256,552 | $ | 1,255,146 |
Nine Months Ended | ||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Product | $ | 1,336,309 | $ | 43,504 | $ | 1,379,813 | $ | 1,134,658 | $ | 55,866 | $ | 1,190,524 | ||||||||||||
Service | 195,728 | - | 195,728 | 178,976 | - | 178,976 | ||||||||||||||||||
Total | 1,532,037 | 43,504 | 1,575,541 | 1,313,634 | 55,866 | 1,369,500 | ||||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Product | 1,054,267 | 8,085 | 1,062,352 | 899,437 | 15,229 | 914,666 | ||||||||||||||||||
Service | 127,990 | - | 127,990 | 109,203 | - | 109,203 | ||||||||||||||||||
Total | 1,182,257 | 8,085 | 1,190,342 | 1,008,640 | 15,229 | 1,023,869 | ||||||||||||||||||
Gross Profit | 349,780 | 35,419 | 385,199 | 304,994 | 40,637 | 345,631 | ||||||||||||||||||
Selling, general, and administrative | 235,147 | 13,054 | 248,201 | 210,369 | 9,784 | 220,153 | ||||||||||||||||||
Depreciation and amortization | 10,304 | 83 | 10,387 | 11,292 | 84 | 11,376 | ||||||||||||||||||
Interest and financing costs | 2,117 | 746 | 2,863 | 693 | 569 | 1,262 | ||||||||||||||||||
Operating expenses | 247,568 | 13,883 | 261,451 | 222,354 | 10,437 | 232,791 | ||||||||||||||||||
Operating income | 102,212 | 21,536 | 123,748 | 82,640 | 30,200 | 112,840 | ||||||||||||||||||
Other income (expense), net | (3,112 | ) | (377 | ) | ||||||||||||||||||||
Earnings before tax | $ | 120,636 | $ | 112,463 | ||||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Contracts with customers | $ | 1,516,632 | $ | 8,428 | $ | 1,525,060 | $ | 1,300,643 | $ | 13,034 | $ | 1,313,677 | ||||||||||||
Financing and other | 15,405 | 35,076 | 50,481 | 12,991 | 42,832 | 55,823 | ||||||||||||||||||
Total | $ | 1,532,037 | $ | 43,504 | $ | 1,575,541 | $ | 1,313,634 | $ | 55,866 | $ | 1,369,500 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 11,312 | $ | 2,936 | $ | 14,248 | $ | 12,023 | $ | 6,597 | $ | 18,620 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 4,122 | $ | 1,539 | $ | 5,661 | $ | 3,594 | $ | 17,781 | $ | 21,375 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 1,301,459 | $ | 296,406 | $ | 1,597,865 | $ | 998,594 | $ | 256,552 | $ | 1,255,146 |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Customer end market: | ||||||||||||||||||||||||
Telecom, Media & Entertainment | $ | 128,277 | $ | 112,192 | ||||||||||||||||||||
Telecom, media & entertainment | $ | 184,539 | $ | 152,584 | $ | 431,269 | $ | 380,560 | ||||||||||||||||
Technology | 69,862 | 69,140 | 133,067 | 67,959 | 299,088 | 190,851 | ||||||||||||||||||
Healthcare | 68,512 | 54,688 | 69,825 | 64,775 | 205,297 | 207,700 | ||||||||||||||||||
State and local government and educational institutions | 64,602 | 65,415 | 72,730 | 59,449 | 207,823 | 193,526 | ||||||||||||||||||
Financial Services | 33,299 | 30,011 | ||||||||||||||||||||||
Financial services | 48,008 | 39,182 | 118,917 | 106,229 | ||||||||||||||||||||
All others | 84,233 | 68,912 | 103,605 | 93,026 | 269,643 | 234,768 | ||||||||||||||||||
Net sales | 448,785 | 400,358 | 611,774 | 476,975 | 1,532,037 | 1,313,634 | ||||||||||||||||||
Less: Revenue from financing and other | (4,983 | ) | (3,817 | ) | (5,916 | ) | (3,212 | ) | (15,405 | ) | (12,991 | ) | ||||||||||||
Revenue from contracts with customers | $ | 443,802 | $ | 396,541 | $ | 605,858 | $ | 473,763 | $ | 1,516,632 | $ | 1,300,643 |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Vendor: | ||||||||||||||||||||||||
Cisco Systems | $ | 156,878 | $ | 166,902 | ||||||||||||||||||||
Cisco systems | $ | 237,334 | $ | 183,195 | $ | 579,530 | $ | 524,169 | ||||||||||||||||
Juniper networks | 50,937 | 28,792 | 113,026 | 71,944 | ||||||||||||||||||||
Dell EMC | 61,873 | 26,340 | 33,636 | 40,254 | 110,730 | 110,092 | ||||||||||||||||||
Juniper Networks | 22,509 | 24,714 | ||||||||||||||||||||||
HPE | 22,981 | 8,293 | 62,110 | 29,594 | ||||||||||||||||||||
NetApp | 13,985 | 10,457 | 21,987 | 30,261 | 52,682 | 70,254 | ||||||||||||||||||
Arista Networks | 11,172 | 11,498 | ||||||||||||||||||||||
Arista networks | 21,423 | 13,484 | 41,528 | 33,029 | ||||||||||||||||||||
All others | 182,368 | 160,447 | 223,476 | 172,696 | 572,431 | 474,552 | ||||||||||||||||||
Net sales | 448,785 | 400,358 | 611,774 | 476,975 | 1,532,037 | 1,313,634 | ||||||||||||||||||
Less: Revenue from financing and other | (4,983 | ) | (3,817 | ) | (5,916 | ) | (3,212 | ) | (15,405 | ) | (12,991 | ) | ||||||||||||
Revenue from contracts with customers | $ | 443,802 | $ | 396,541 | $ | 605,858 | $ | 473,763 | $ | 1,516,632 | $ | 1,300,643 |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
Consolidated | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Net sales | $ | 458,359 | $ | 416,649 | $ | 623,476 | $ | 494,834 | $ | 1,575,541 | $ | 1,369,500 | ||||||||||||
Gross profit | $ | 113,523 | $ | 105,512 | $ | 138,372 | $ | 117,117 | $ | 385,199 | $ | 345,631 | ||||||||||||
Gross margin | 24.8 | % | 25.3 | % | 22.2 | % | 23.7 | % | 24.4 | % | 25.2 | % | ||||||||||||
Operating income margin | 7.2 | % | 7.8 | % | 7.5 | % | 7.3 | % | 7.9 | % | 8.2 | % | ||||||||||||
Net earnings | $ | 22,339 | $ | 23,518 | $ | 35,694 | $ | 26,424 | $ | 86,502 | $ | 81,355 | ||||||||||||
Net earnings margin | 4.9 | % | 5.6 | % | 5.7 | % | 5.3 | % | 5.5 | % | 5.9 | % | ||||||||||||
Net earnings per common share - diluted | $ | 0.84 | $ | 0.87 | $ | 1.34 | $ | 0.98 | $ | 3.24 | $ | 3.03 | ||||||||||||
Non-GAAP: Net earnings (1) | $ | 26,513 | $ | 26,353 | $ | 36,714 | $ | 29,711 | $ | 97,623 | $ | 90,870 | ||||||||||||
Non-GAAP: Net earnings per common share - diluted (1) | $ | 0.99 | $ | 0.98 | $ | 1.38 | $ | 1.10 | $ | 3.66 | $ | 3.38 | ||||||||||||
Adjusted EBITDA (2) | $ | 38,304 | $ | 38,272 | $ | 53,325 | $ | 41,797 | $ | 141,933 | $ | 130,264 | ||||||||||||
Adjusted EBITDA margin | 8.4 | % | 9.2 | % | 8.6 | % | 8.4 | % | 9.0 | % | 9.5 | % | ||||||||||||
Technology Segment | ||||||||||||||||||||||||
Net sales | $ | 448,785 | $ | 400,358 | $ | 611,774 | $ | 476,975 | $ | 1,532,037 | $ | 1,313,634 | ||||||||||||
Adjusted gross billings (3) | $ | 701,943 | $ | 633,007 | $ | 888,621 | $ | 685,031 | $ | 2,356,326 | $ | 1,982,162 | ||||||||||||
Gross profit | $ | 105,651 | $ | 95,433 | $ | 127,854 | $ | 104,483 | $ | 349,780 | $ | 304,994 | ||||||||||||
Gross margin | 23.5 | % | 23.8 | % | 20.9 | % | 21.9 | % | 22.8 | % | 23.2 | % | ||||||||||||
Operating income | $ | 29,219 | $ | 25,223 | $ | 41,090 | $ | 27,166 | $ | 102,212 | $ | 82,640 | ||||||||||||
Adjusted EBITDA (2) | $ | 34,254 | $ | 30,958 | $ | 47,869 | $ | 32,794 | $ | 120,135 | $ | 99,811 | ||||||||||||
Financing Segment | ||||||||||||||||||||||||
Net sales | $ | 9,574 | $ | 16,291 | $ | 11,702 | $ | 17,859 | $ | 43,504 | $ | 55,866 | ||||||||||||
Gross profit | $ | 7,872 | $ | 10,079 | $ | 10,518 | $ | 12,634 | $ | 35,419 | $ | 40,637 | ||||||||||||
Operating income | $ | 3,964 | $ | 7,229 | $ | 5,368 | $ | 8,919 | $ | 21,536 | $ | 30,200 | ||||||||||||
Adjusted EBITDA (2) | $ | 4,050 | $ | 7,314 | $ | 5,456 | $ | 9,003 | $ | 21,798 | $ | 30,453 |
(1) |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
GAAP: Earnings before tax | $ | 31,030 | $ | 32,575 | $ | 49,365 | $ | 35,910 | $ | 120,636 | $ | 112,463 | ||||||||||||
Share based compensation | 1,773 | 1,735 | 1,950 | 1,780 | 5,681 | 5,355 | ||||||||||||||||||
Acquisition related amortization expense | 2,183 | 2,696 | 2,505 | 2,497 | 7,182 | 7,854 | ||||||||||||||||||
Other (income) expense | 2,153 | (123 | ) | (2,907 | ) | 175 | 3,112 | 377 | ||||||||||||||||
Non-GAAP: Earnings before provision for income taxes | 37,139 | 36,883 | 50,913 | 40,362 | 136,611 | 126,049 | ||||||||||||||||||
GAAP: Provision for income taxes | 8,691 | 9,057 | 13,671 | 9,486 | 34,134 | 31,108 | ||||||||||||||||||
Share based compensation | 508 | 496 | 544 | 470 | 1,624 | 1,494 | ||||||||||||||||||
Acquisition related amortization expense | 617 | 757 | 693 | 649 | 2,030 | 2,156 | ||||||||||||||||||
Other (income) expense | 616 | (35 | ) | (811 | ) | 46 | 933 | 104 | ||||||||||||||||
Tax benefit on restricted stock | 194 | 255 | ||||||||||||||||||||||
Tax benefit (expense) on restricted stock | 102 | - | 267 | 317 | ||||||||||||||||||||
Non-GAAP: Provision for income taxes | 10,626 | 10,530 | 14,199 | 10,651 | 38,988 | 35,179 | ||||||||||||||||||
Non-GAAP: Net earnings | $ | 26,513 | $ | 26,353 | $ | 36,714 | $ | 29,711 | $ | 97,623 | $ | 90,870 |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
GAAP: Net earnings per common share - diluted | $ | 0.84 | $ | 0.87 | $ | 1.34 | $ | 0.98 | $ | 3.24 | $ | 3.03 | ||||||||||||
Share based compensation | 0.04 | 0.05 | 0.05 | 0.05 | 0.15 | 0.14 | ||||||||||||||||||
Acquisition related amortization expense | 0.06 | 0.07 | 0.07 | 0.07 | 0.20 | 0.21 | ||||||||||||||||||
Other (income) expense | 0.06 | - | (0.08 | ) | - | 0.08 | 0.01 | |||||||||||||||||
Tax benefit on restricted stock | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||
Tax benefit (expense) on restricted stock | - | - | (0.01 | ) | (0.01 | ) | ||||||||||||||||||
Total non-GAAP adjustments - net of tax | 0.15 | 0.11 | 0.04 | 0.12 | 0.42 | 0.35 | ||||||||||||||||||
Non-GAAP: Net earnings per common share - diluted | $ | 0.99 | $ | 0.98 | $ | 1.38 | $ | 1.10 | $ | 3.66 | $ | 3.38 |
(2) | We define Adjusted EBITDA as net earnings calculated in accordance with US 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 US 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. |
Three Months Ended June 30, | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
Consolidated | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
Net earnings | $ | 22,339 | $ | 23,518 | $ | 35,694 | $ | 26,424 | $ | 86,502 | $ | 81,355 | ||||||||||||
Provision for income taxes | 8,691 | 9,057 | 13,671 | 9,486 | 34,134 | 31,108 | ||||||||||||||||||
Share based compensation | 1,773 | 1,735 | 1,950 | 1,780 | 5,681 | 5,355 | ||||||||||||||||||
Interest and financing costs | 138 | 159 | 1,308 | 335 | 2,117 | 693 | ||||||||||||||||||
Depreciation and amortization | 3,210 | 3,926 | 3,609 | 3,597 | 10,387 | 11,376 | ||||||||||||||||||
Other income (expense) | 2,153 | (123 | ) | (2,907 | ) | 175 | 3,112 | 377 | ||||||||||||||||
Adjusted EBITDA | $ | 38,304 | $ | 38,272 | $ | 53,325 | $ | 41,797 | $ | 141,933 | $ | 130,264 | ||||||||||||
Technology Segment | ||||||||||||||||||||||||
Operating income | $ | 29,219 | $ | 25,223 | $ | 41,090 | $ | 27,166 | $ | 102,212 | $ | 82,640 | ||||||||||||
Depreciation and amortization | 3,182 | 3,898 | 3,582 | 3,569 | 10,304 | 11,292 | ||||||||||||||||||
Share based compensation | 1,715 | 1,678 | 1,889 | 1,724 | 5,502 | 5,186 | ||||||||||||||||||
Interest and financing costs | 138 | 159 | 1,308 | 335 | 2,117 | 693 | ||||||||||||||||||
Adjusted EBITDA | $ | 34,254 | $ | 30,958 | $ | 47,869 | $ | 32,794 | $ | 120,135 | $ | 99,811 | ||||||||||||
Financing Segment | ||||||||||||||||||||||||
Operating income | $ | 3,964 | $ | 7,229 | $ | 5,368 | $ | 8,919 | $ | 21,536 | $ | 30,200 | ||||||||||||
Depreciation and amortization | 28 | 28 | 27 | 28 | 83 | 84 | ||||||||||||||||||
Share based compensation | 58 | 57 | 61 | 56 | 179 | 169 | ||||||||||||||||||
Adjusted EBITDA | $ | 4,050 | $ | 7,314 | $ | 5,456 | $ | 9,003 | $ | 21,798 | $ | 30,453 |
(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 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Technology segment net sales | $ | 448,785 | $ | 400,358 | ||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/SaaS licenses, and services | 253,158 | 232,649 | ||||||
Adjusted gross billings | $ | 701,943 | $ | 633,007 |
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Technology segment net sales | $ | 611,774 | $ | 476,975 | $ | 1,532,037 | $ | 1,313,634 | ||||||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/SaaS licenses, and services | 276,847 | 208,056 | 824,289 | $ | 668,528 | |||||||||||
Adjusted gross billings | $ | 888,621 | $ | 685,031 | $ | 2,356,326 | $ | 1,982,162 |
Three Months Ended June 30, | Change | Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||||
Product | $ | 385,676 | $ | 344,766 | $ | 40,910 | 11.9 | % | $ | 544,316 | $ | 414,448 | $ | 1,336,309 | $ | 1,134,658 | ||||||||||||||||
Services | 63,109 | 55,592 | 7,517 | 13.5 | % | 67,458 | 62,527 | 195,728 | 178,976 | |||||||||||||||||||||||
Total | 448,785 | 400,358 | 48,427 | 12.1 | % | 611,774 | 476,975 | 1,532,037 | 1,313,634 | |||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||
Product | 302,508 | 271,015 | 31,493 | 11.6 | % | 439,831 | 334,585 | 1,054,267 | 899,437 | |||||||||||||||||||||||
Services | 40,626 | 33,910 | 6,716 | 19.8 | % | 44,089 | 37,907 | 127,990 | 109,203 | |||||||||||||||||||||||
Total | 343,134 | 304,925 | 38,209 | 12.5 | % | 483,920 | 372,492 | 1,182,257 | 1,008,640 | |||||||||||||||||||||||
Gross profit | 105,651 | 95,433 | 10,218 | 10.7 | % | 127,854 | 104,483 | 349,780 | 304,994 | |||||||||||||||||||||||
Selling, general, and administrative | 73,112 | 66,153 | 6,959 | 10.5 | % | 81,874 | 73,413 | 235,147 | 210,369 | |||||||||||||||||||||||
Depreciation and amortization | 3,182 | 3,898 | (716 | ) | (18.4 | %) | 3,582 | 3,569 | 10,304 | 11,292 | ||||||||||||||||||||||
Interest and financing costs | 138 | 159 | (21 | ) | (13.2 | %) | 1,308 | 335 | 2,117 | 693 | ||||||||||||||||||||||
Operating expenses | 76,432 | 70,210 | 6,222 | 8.9 | % | 86,764 | 77,317 | 247,568 | 222,354 | |||||||||||||||||||||||
Operating income | $ | 29,219 | $ | 25,223 | $ | 3,996 | 15.8 | % | $ | 41,090 | $ | 27,166 | $ | 102,212 | $ | 82,640 | ||||||||||||||||
Adjusted gross billings | $ | 701,943 | $ | 633,007 | $ | 68,936 | 10.9 | % | $ | 888,621 | $ | 685,031 | $ | 2,356,326 | $ | 1,982,162 | ||||||||||||||||
Adjusted EBITDA | $ | 34,254 | $ | 30,958 | $ | 3,296 | 10.6 | % | $ | 47,869 | $ | 32,794 | $ | 120,135 | $ | 99,811 |
Twelve Months Ended June 30, | Change | Twelve Months Ended December 31, | ||||||||||||||||||||||
Net sales by customer end market: | 2022 | 2021 | 2022 | 2021 | Change | |||||||||||||||||||
Telecom, Media & Entertainment | 29 | % | 27 | % | 2 | % | 28 | % | 29 | % | (1 | %) | ||||||||||||
Technology | 18 | % | 15 | % | 3 | % | ||||||||||||||||||
Healthcare | 16 | % | 13 | % | 3 | % | 14 | % | 16 | % | (2 | %) | ||||||||||||
Technology | 14 | % | 16 | % | (2 | %) | ||||||||||||||||||
SLED | 14 | % | 15 | % | (1 | %) | 13 | % | 15 | % | (2 | %) | ||||||||||||
Financial Services | 9 | % | 12 | % | (3 | %) | 9 | % | 9 | % | 0 | % | ||||||||||||
All others | 18 | % | 17 | % | 1 | % | 18 | % | 16 | % | 2 | % | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Twelve Months Ended June 30, | Change | Twelve Months Ended December 31, | ||||||||||||||||||||||
Net sales by vendor: | 2022 | 2021 | 2022 | 2021 | Change | |||||||||||||||||||
Cisco Systems | 37 | % | 37 | % | 0 | % | 37 | % | 38 | % | (1 | %) | ||||||||||||
Dell EMC | 10 | % | 7 | % | 3 | % | 8 | % | 8 | % | 0 | % | ||||||||||||
Juniper Networks | 5 | % | 7 | % | (2 | %) | 7 | % | 6 | % | 1 | % | ||||||||||||
NetApp | 5 | % | 3 | % | 2 | % | 4 | % | 5 | % | (1 | %) | ||||||||||||
HPE | 4 | % | 2 | % | 2 | % | ||||||||||||||||||
Arista Networks | 2 | % | 4 | % | (2 | %) | 3 | % | 3 | % | 0 | % | ||||||||||||
All others | 41 | % | 42 | % | (1 | %) | 37 | % | 38 | % | (1 | %) | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended June 30, | Change | Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||
Net sales | $ | 9,574 | $ | 16,291 | $ | (6,717 | ) | (41.2 | %) | $ | 11,702 | $ | 17,859 | $ | 43,504 | $ | 55,866 | |||||||||||||||
Cost of sales | 1,702 | 6,212 | (4,510 | ) | (72.6 | %) | 1,184 | 5,225 | 8,085 | 15,229 | ||||||||||||||||||||||
Gross profit | 7,872 | 10,079 | (2,207 | ) | (21.9 | %) | 10,518 | 12,634 | 35,419 | 40,637 | ||||||||||||||||||||||
Selling, general, and administrative | 3,655 | 2,622 | 1,033 | 39.4 | % | 4,856 | 3,461 | 13,054 | 9,784 | |||||||||||||||||||||||
Depreciation and amortization | 28 | 28 | - | 0.0 | % | 27 | 28 | 83 | 84 | |||||||||||||||||||||||
Interest and financing costs | 225 | 200 | 25 | 12.5 | % | 267 | 226 | 746 | 569 | |||||||||||||||||||||||
Operating expenses | 3,908 | 2,850 | 1,058 | 37.1 | % | 5,150 | 3,715 | 13,883 | 10,437 | |||||||||||||||||||||||
Operating income | $ | 3,964 | $ | 7,229 | $ | (3,265 | ) | (45.2 | %) | $ | 5,368 | $ | 8,919 | $ | 21,536 | $ | 30,200 | |||||||||||||||
Adjusted EBITDA | $ | 4,050 | $ | 7,314 | $ | (3,264 | ) | (44.6 | %) | $ | 5,456 | $ | 9,003 | $ | 21,798 | $ | 30,453 |
Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net cash used in operating activities | $ | (102,943 | ) | $ | (65,136 | ) | ||
Net cash used in investing activities | (1,692 | ) | (6,151 | ) | ||||
Net cash provided by financing activities | 31,111 | 35,494 | ||||||
Effect of exchange rate changes on cash | 1,634 | 71 | ||||||
Net decrease in cash and cash equivalents | $ | (71,890 | ) | $ | (35,722 | ) |
Nine Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
Net cash used in operating activities | $ | (147,038 | ) | $ | (121,542 | ) | ||
Net cash used in investing activities | (15,624 | ) | (18,448 | ) | ||||
Net cash provided by financing activities | 103,555 | 115,996 | ||||||
Effect of exchange rate changes on cash | 3,124 | (2 | ) | |||||
Net decrease in cash and cash equivalents | $ | (55,983 | ) | $ | (23,996 | ) |
Three Months Ended June 30, | Nine Months Ended December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Technology segment | $ | (104,645 | ) | $ | (65,980 | ) | $ | (115,811 | ) | $ | (112,740 | ) | ||||
Financing segment | 1,702 | 844 | (31,227 | ) | (8,802 | ) | ||||||||||
Net cash provided by (used in) operating activities | $ | (102,943 | ) | $ | (65,136 | ) | ||||||||||
Net cash used in operating activities | $ | (147,038 | ) | $ | (121,542 | ) |
As of June 30, | As of December 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(DSO) Days sales outstanding (1) | 61 | 61 | 62 | 67 | ||||||||||||
(DIO) Days inventory outstanding (2) | 30 | 13 | 30 | 21 | ||||||||||||
(DPO) Days payable outstanding (3) | (45 | ) | (42 | ) | (41 | ) | (41 | ) | ||||||||
Cash conversion cycle | 46 | 32 | 51 | 47 |
(1) | Represents the rolling three month average of the balance of trade accounts receivable-trade, net for our technology segment at the end of the period divided by adjusted gross billings for the same three month period. |
(2) | Represents the rolling three month average of the balance of inventory, net for our technology segment at the end of the period divided by cost of adjusted gross billings for the same three month period. |
(3) | Represents the rolling three month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our technology segment at the end of the period divided by cost of adjusted gross billings for the same three month period. |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
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 | 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, 2022 through April 30, 2022 | 34,961 | $ | 56.02 | 34,961 | 737,049 | (2 | ) | 34,961 | $ | 56.02 | 34,961 | 737,049 | (2 | ) | |||||||||||||||||||||||||
May 1, 2022 through May 27, 2022 | 35,512 | $ | 55.86 | 35,512 | 701,537 | (3 | ) | 35,512 | $ | 55.86 | 35,512 | 701,537 | (3 | ) | |||||||||||||||||||||||||
May 28, 2022 through May 31, 2022 | - | $ | - | - | 1,000,000 | (4 | ) | - | $ | - | - | 1,000,000 | (4 | ) | |||||||||||||||||||||||||
June 1, 2022 through June 30, 2022 | 58,080 | $ | 56.51 | - | 1,000,000 | (5 | ) | 58,080 | $ | 56.51 | - | 1,000,000 | (5 | ) | |||||||||||||||||||||||||
July 1, 2022 through July 31, 2022 | - | $ | - | - | 1,000,000 | (6 | ) | ||||||||||||||||||||||||||||||||
August 1, 2022 through August 31, 2022 | - | $ | - | - | 1,000,000 | (7 | ) | ||||||||||||||||||||||||||||||||
September 1, 2022 through September 30, 2022 | - | $ | - | - | 1,000,000 | (8 | ) | ||||||||||||||||||||||||||||||||
October 1, 2022 through October 31, 2022 | - | $ | - | - | 1,000,000 | (9 | ) | ||||||||||||||||||||||||||||||||
November 1, 2022 through November 30, 2022 | - | $ | - | - | 1,000,000 | (10 | ) | ||||||||||||||||||||||||||||||||
December 1, 2022 through December 31, 2022 | - | $ | - | - | 1,000,000 | (11 | ) |
(1) | All shares acquired were in open-market purchases, except for 58,080 shares, which were repurchased in June 2022 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, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of April 30, 2022, the remaining authorized shares to be purchased were 737,049. |
(3) | As of May 27, 2022, the authorization under the then-existing share repurchase plan expired. |
(4) | On March 24, 2022, the board of directors authorized the company to repurchase up to 1,000,000 shares of our outstanding common stock commencing on May 28, 2022, and continuing to May 27, 2023. As of May 31, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(5) | The share purchase authorization in place for the month ended June 30, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of June 30, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(6) | The share purchase authorization in place for the month ended July 31, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of July 31, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(7) | The share purchase authorization in place for the month ended August 31, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of August 31, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(8) | The share purchase authorization in place for the month ended September 30, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of September 30, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(9) | The share purchase authorization in place for the month ended October 31, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of October 31, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(10) | The share purchase authorization in place for the month ended November 30, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of November 30, 2022, the remaining authorized shares to be purchased were 1,000,000. |
(11) | The share purchase authorization in place for the month ended December 31, 2022, had purchase limitations on the number of shares of up to 1,000,000 shares. As of December 31, 2022, the remaining authorized shares to be purchased were 1,000,000. |
Item 5. | OTHER INFORMATION |
Exhibit Number | Exhibit Description | |
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). | ||
Amended and Restated Bylaws of ePlus inc., as of March 2, 2022. (Incorporated herein by reference to Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2022). | ||
First Amendment to First Amended and Restated Credit Agreement, dated as of October 31, 2022, 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 10.2 to our Current Report on Form 8-K filed on November 3, 2022).* | ||
Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) | ||
Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) | ||
Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § | ||
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) |
ePlus inc. | |||
Date: | /s/ MARK P. MARRON | ||
By: | Mark P. Marron | ||
Chief Executive Officer and President | |||
(Principal Executive Officer) |
Date: | /s/ ELAINE D. MARION | ||
By: | Elaine D. Marion | ||
Chief Financial Officer | |||
(Principal Financial Officer) |