☒ | 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, $.01 par value | 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. | 27 | ||
Item 3. | 44 | ||
Item 4. | 44 | ||
Part II. Other Information: | |||
Item 1. | 45 | ||
Item 1A. | 45 | ||
Item 2. | 45 | ||
Item 3. | 45 | ||
Item 4. | 45 | ||
Item 5. | 46 | ||
Item 6. | 46 | ||
47 |
• | 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); |
September 30, 2022 | March 31, 2022 | June 30, 2023 | March 31, 2023 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 99,531 | $ | 155,378 | $ | 101,574 | $ | 103,093 | ||||||||
Accounts receivable—trade, net | 525,176 | 430,380 | 677,988 | 504,122 | ||||||||||||
Accounts receivable—other, net | 44,278 | 48,673 | 78,637 | 55,508 | ||||||||||||
Inventories | 274,863 | 155,060 | 244,331 | 243,286 | ||||||||||||
Financing receivables—net, current | 65,010 | 61,492 | 81,111 | 89,829 | ||||||||||||
Deferred costs | 36,085 | 32,555 | 45,408 | 44,191 | ||||||||||||
Other current assets | 24,970 | 13,944 | 47,084 | 55,101 | ||||||||||||
Total current assets | 1,069,913 | 897,482 | 1,276,133 | 1,095,130 | ||||||||||||
Financing receivables and operating leases—net | 75,093 | 64,292 | 120,664 | 84,417 | ||||||||||||
Deferred tax asset—net | 5,058 | 5,050 | ||||||||||||||
Deferred tax asset | 3,682 | 3,682 | ||||||||||||||
Property, equipment, and other assets | 55,033 | 45,586 | 70,794 | 70,447 | ||||||||||||
Goodwill | 135,907 | 126,543 | 158,280 | 136,105 | ||||||||||||
Other intangible assets—net | 30,336 | 27,250 | 51,253 | 25,045 | ||||||||||||
TOTAL ASSETS | $ | 1,371,340 | $ | 1,166,203 | $ | 1,680,806 | $ | 1,414,826 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
LIABILITIES | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 192,511 | $ | 136,161 | $ | 351,384 | $ | 220,159 | ||||||||
Accounts payable—floor plan | 136,215 | 145,323 | 182,859 | 134,615 | ||||||||||||
Salaries and commissions payable | 34,304 | 39,602 | 41,144 | 37,336 | ||||||||||||
Deferred revenue | 108,004 | 86,469 | 118,976 | 114,028 | ||||||||||||
Recourse notes payable—current | 92,744 | 7,316 | 58,115 | 5,997 | ||||||||||||
Non-recourse notes payable—current | 10,346 | 17,070 | 17,742 | 24,819 | ||||||||||||
Other current liabilities | 33,187 | 28,095 | 30,566 | 24,372 | ||||||||||||
Total current liabilities | 607,311 | 460,036 | 800,786 | 561,326 | ||||||||||||
Recourse notes payable - long-term | 1,947 | 5,792 | ||||||||||||||
Non-recourse notes payable - long-term | 10,446 | 4,108 | 5,005 | 9,522 | ||||||||||||
Deferred tax liability | 717 | 715 | ||||||||||||||
Other liabilities | 45,991 | 35,529 | 61,007 | 60,998 | ||||||||||||
TOTAL LIABILITIES | 665,695 | 505,465 | 867,515 | 632,561 | ||||||||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||||||||||
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; 26,906 outstanding at September 30, 2022 and 26,886 outstanding at March 31, 2022 | 272 | 270 | ||||||||||||||
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,947 outstanding at June 30, 2023 and 26,905 outstanding at March 31, 2023 | 274 | 272 | ||||||||||||||
Additional paid-in capital | 163,211 | 159,480 | 170,904 | 167,303 | ||||||||||||
Treasury stock, at cost, 258 shares at September 30, 2022 and 130 shares at March 31, 2022 | (13,958 | ) | (6,734 | ) | ||||||||||||
Treasury stock, at cost, 408 shares at June 30, 2023 and 261 shares at March 31, 2023 | (21,451 | ) | (14,080 | ) | ||||||||||||
Retained earnings | 558,654 | 507,846 | 661,049 | 627,202 | ||||||||||||
Accumulated other comprehensive income—foreign currency translation adjustment | (2,534 | ) | (124 | ) | 2,515 | 1,568 | ||||||||||
Total Stockholders’ Equity | 705,645 | 660,738 | 813,291 | 782,265 | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,371,340 | $ | 1,166,203 | $ | 1,680,806 | $ | 1,414,826 |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Net sales | ||||||||||||||||||||||||
Product | $ | 428,545 | $ | 397,160 | $ | 823,795 | $ | 758,217 | $ | 506,656 | $ | 395,250 | ||||||||||||
Services | 65,161 | 60,857 | 128,270 | 116,449 | 67,519 | 63,109 | ||||||||||||||||||
Total | 493,706 | 458,017 | 952,065 | 874,666 | 574,175 | 458,359 | ||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||
Product | 317,127 | 297,629 | 621,337 | 574,856 | 388,904 | 304,210 | ||||||||||||||||||
Services | 43,275 | 37,386 | 83,901 | 71,296 | 42,998 | 40,626 | ||||||||||||||||||
Total | 360,402 | 335,015 | 705,238 | 646,152 | 431,902 | 344,836 | ||||||||||||||||||
Gross profit | 133,304 | 123,002 | 246,827 | 228,514 | 142,273 | 113,523 | ||||||||||||||||||
Selling, general, and administrative | 84,704 | 74,504 | 161,471 | 143,279 | 90,298 | 76,767 | ||||||||||||||||||
Depreciation and amortization | 3,568 | 3,853 | 6,778 | 7,779 | 4,792 | 3,210 | ||||||||||||||||||
Interest and financing costs | 925 | 342 | 1,288 | 701 | 851 | 363 | ||||||||||||||||||
Operating expenses | 89,197 | 78,699 | 169,537 | 151,759 | 95,941 | 80,340 | ||||||||||||||||||
Operating income | 44,107 | 44,303 | 77,290 | 76,755 | 46,332 | 33,183 | ||||||||||||||||||
Other income (expense) | (3,866 | ) | (325 | ) | (6,019 | ) | (202 | ) | ||||||||||||||||
Other income (expense), net | 190 | (2,153 | ) | |||||||||||||||||||||
Earnings before tax | 40,241 | 43,978 | 71,271 | 76,553 | 46,522 | 31,030 | ||||||||||||||||||
Provision for income taxes | 11,772 | 12,565 | 20,463 | 21,622 | 12,675 | 8,691 | ||||||||||||||||||
Net earnings | $ | 28,469 | $ | 31,413 | $ | 50,808 | $ | 54,931 | $ | 33,847 | $ | 22,339 | ||||||||||||
Net earnings per common share—basic | $ | 1.07 | $ | 1.18 | $ | 1.91 | $ | 2.06 | $ | 1.27 | $ | 0.84 | ||||||||||||
Net earnings per common share—diluted | $ | 1.07 | $ | 1.17 | $ | 1.91 | $ | 2.04 | $ | 1.27 | $ | 0.84 | ||||||||||||
Weighted average common shares outstanding—basic | 26,578 | 26,664 | 26,546 | 26,666 | 26,552 | 26,513 | ||||||||||||||||||
Weighted average common shares outstanding—diluted | 26,623 | 26,864 | 26,671 | 26,862 | 26,648 | 26,685 |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
NET EARNINGS | $ | 28,469 | $ | 31,413 | $ | 50,808 | $ | 54,931 | $ | 33,847 | $ | 22,339 | ||||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||||||||||||||||||||||
Foreign currency translation adjustments | (1,071 | ) | (506 | ) | (2,410 | ) | (440 | ) | 947 | (1,339 | ) | |||||||||||||
Other comprehensive income (loss) | (1,071 | ) | (506 | ) | (2,410 | ) | (440 | ) | 947 | (1,339 | ) | |||||||||||||
TOTAL COMPREHENSIVE INCOME | $ | 27,398 | $ | 30,907 | $ | 48,398 | $ | 54,491 | $ | 34,794 | $ | 21,000 |
Six Months Ended September 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net earnings | $ | 50,808 | $ | 54,931 | $ | 33,847 | $ | 22,339 | ||||||||
Adjustments to reconcile net earnings to net cash used in operating activities: | ||||||||||||||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization | 9,539 | 12,044 | 5,755 | 4,472 | ||||||||||||
Provision for credit losses | 1,739 | 98 | 478 | 698 | ||||||||||||
Share-based compensation expense | 3,731 | 3,575 | 2,205 | 1,773 | ||||||||||||
Deferred taxes | - | (1 | ) | |||||||||||||
Payments from lessees directly to lenders—operating leases | - | (32 | ) | |||||||||||||
Gain on disposal of property, equipment, and operaing lease equipment | (3,052 | ) | (525 | ) | ||||||||||||
Gain on disposal of property, equipment, and operating lease equipment | (160 | ) | (224 | ) | ||||||||||||
Changes in: | ||||||||||||||||
Accounts receivable | (93,103 | ) | (85,463 | ) | (166,803 | ) | (53,556 | ) | ||||||||
Inventories-net | (122,182 | ) | (64,661 | ) | 300 | (92,678 | ) | |||||||||
Financing receivables—net | (23,164 | ) | (18,019 | ) | (42,071 | ) | (20,574 | ) | ||||||||
Deferred costs and other assets | (24,711 | ) | (6,115 | ) | 8,303 | (4,177 | ) | |||||||||
Accounts payable-trade | 49,626 | (43,375 | ) | 124,948 | 30,376 | |||||||||||
Salaries and commissions payable, deferred revenue, and other liabilities | 31,098 | 12,539 | 12,298 | 8,608 | ||||||||||||
Net cash used in operating activities | (119,671 | ) | (135,004 | ) | (20,900 | ) | (102,943 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds from sale of property, equipment, and operating lease equipment | 3,114 | 2,553 | 196 | 85 | ||||||||||||
Purchases of property, equipment and operating lease equipment | (2,410 | ) | (16,243 | ) | (3,698 | ) | (1,777 | ) | ||||||||
Cash used in acquisitions, net of cash acquired | (12,998 | ) | - | (59,595 | ) | - | ||||||||||
Net cash used in investing activities | (12,294 | ) | (13,690 | ) | (63,097 | ) | (1,692 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Borrowings of non-recourse and recourse notes payable | 142,271 | 64,815 | 97,955 | 49,256 | ||||||||||||
Repayments of non-recourse and recourse notes payable | (54,597 | ) | (29,386 | ) | (41,573 | ) | (3,645 | ) | ||||||||
Proceeds from issuance of common stock | 1,398 | - | ||||||||||||||
Repurchase of common stock | (7,224 | ) | (6,874 | ) | (7,465 | ) | (7,224 | ) | ||||||||
Net borrowings (repayments) on floor plan facility | (9,108 | ) | 47,227 | 32,290 | (7,276 | ) | ||||||||||
Net cash provided by financing activities | 71,342 | 75,782 | 82,605 | 31,111 | ||||||||||||
Effect of exchange rate changes on cash | 4,776 | 300 | (127 | ) | 1,634 | |||||||||||
Net decrease in cash and cash equivalents | (55,847 | ) | (72,612 | ) | (1,519 | ) | (71,890 | ) | ||||||||
Cash and cash equivalents, beginning of period | 155,378 | 129,562 | 103,093 | 155,378 | ||||||||||||
Cash and cash equivalents, end of period | $ | 99,531 | $ | 56,950 | $ | 101,574 | $ | 83,488 |
Six Months Ended September 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for interest | $ | 1,111 | $ | 683 | $ | 566 | $ | 341 | ||||||||
Cash paid for income taxes | $ | 28,878 | $ | 24,511 | $ | 3,605 | $ | 7,532 | ||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | 2,300 | $ | 2,280 | $ | 1,261 | $ | 1,226 | ||||||||
Schedule of non-cash investing and financing activities: | ||||||||||||||||
Proceeds from sale of property, equipment, and leased equipment | $ | 35 | $ | 100 | $ | 15 | $ | 183 | ||||||||
Purchases of property, equipment, and operating lease equipment | $ | (720 | ) | $ | (2,386 | ) | $ | (200 | ) | $ | (63 | ) | ||||
Consideration for acquisitions | $ | (290 | ) | $ | - | |||||||||||
Borrowing of non-recourse and recourse notes payable | $ | 15,532 | $ | 41,195 | $ | - | $ | 7,267 | ||||||||
Repayments of non-recourse and recourse notes payable | $ | - | $ | (32 | ) | |||||||||||
Vesting of share-based compensation | $ | 9,811 | $ | 8,398 | $ | 8,483 | $ | 9,215 | ||||||||
Repurchase of common stock | $ | (28 | ) | $ | - | |||||||||||
New operating lease assets obtained in exchange for lease obligations | $ | 2,353 | $ | 1,070 | $ | 3,100 | $ | 34 |
Six Months Ended September 30, 2022 | Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Additional | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-In | Treasury | Retained | Comprehensive | Common Stock | Paid-In | Treasury | Retained | Comprehensive | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | Shares | Par Value | Capital | Stock | Earnings | Income | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | 26,886 | $ | 270 | $ | 159,480 | $ | (6,734 | ) | $ | 507,846 | $ | (124 | ) | $ | 660,738 | |||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | 26,905 | $ | 272 | $ | 167,303 | $ | (14,080 | ) | $ | 627,202 | $ | 1,568 | $ | 782,265 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 135 | 1 | - | - | - | - | 1 | 153 | 2 | (2 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 36 | - | 1,398 | - | - | - | 1,398 | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,773 | - | - | - | 1,773 | - | - | 2,205 | - | - | - | 2,205 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (128 | ) | - | - | (7,224 | ) | - | - | (7,224 | ) | (147 | ) | - | - | (7,371 | ) | - | - | (7,371 | ) | ||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 22,339 | - | 22,339 | - | - | - | - | 33,847 | - | 33,847 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (1,339 | ) | (1,339 | ) | - | - | - | - | - | 947 | 947 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 | 26,947 | $ | 274 | $ | 170,904 | $ | (21,451 | ) | $ | 661,049 | $ | 2,515 | $ | 813,291 |
Six Months Ended September 30, 2021 | Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Additional | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-In | Treasury | Retained | Comprehensive | Common Stock | Paid-In | Treasury | Retained | Comprehensive | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | Shares | Par Value | Capital | Stock | Earnings | Income | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | 27,006 | $ | 145 | $ | 152,366 | $ | (75,372 | ) | $ | 484,616 | $ | 655 | $ | 562,410 | ||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | 26,886 | $ | 270 | $ | 159,480 | $ | (6,734 | ) | $ | 507,846 | $ | (124 | ) | $ | 660,738 | |||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 156 | 1 | - | - | - | - | 1 | 135 | 1 | - | - | - | - | 1 | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,735 | - | - | - | 1,735 | - | - | 1,773 | - | - | - | 1,773 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (90 | ) | - | - | (4,111 | ) | - | - | (4,111 | ) | (128 | ) | - | - | (7,224 | ) | - | - | (7,224 | ) | ||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 23,518 | - | 23,518 | - | - | - | - | 22,339 | - | 22,339 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 66 | 66 | - | - | - | - | - | (1,339 | ) | (1,339 | ) | ||||||||||||||||||||||||||||||||||||||||
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 | (64 | ) | - | - | (2,763 | ) | - | - | (2,763 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 31,413 | - | 31,413 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (506 | ) | (506 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | 27,020 | $ | 146 | $ | 155,941 | $ | (82,246 | ) | $ | 539,547 | $ | 215 | $ | 613,603 | ||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | 26,893 | $ | 271 | $ | 161,253 | $ | (13,958 | ) | $ | 530,185 | $ | (1,463 | ) | $ | 676,288 |
1. | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | RECENT ACCOUNTING PRONOUNCEMENTS |
3. | REVENUES |
September 30, 2022 | March 31, 2022 | June 30, 2023 | March 31, 2023 | |||||||||||||
Current (included in deferred revenue) | $ | 107,802 | $ | 85,826 | $ | 118,646 | $ | 113,713 | ||||||||
Non-current (included in other liabilities) | $ | 40,119 | $ | 30,086 | $ | 48,390 | $ | 47,217 |
Remainder of the year ending March 31, 2023 | $ | 33,299 | ||||||
Year ending March 31, 2024 | 34,681 | |||||||
Remainder of the year ending March 31, 2024 | $ | 55,368 | ||||||
Year ending March 31, 2025 | 17,839 | 34,042 | ||||||
Year ending March 31, 2026 | 5,470 | 16,872 | ||||||
Year ending March 31, 2027 and thereafter | 2,354 | |||||||
Year ending March 31, 2027 | 5,298 | |||||||
Year ending March 31, 2028 and thereafter | 2,357 | |||||||
Total remaining performance obligations | $ | 93,643 | $ | 113,937 |
4. | FINANCING RECEIVABLES AND OPERATING LEASES |
Three months ended September 30, | Six months ended September 30, | Three months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Net sales | $ | 4,506 | $ | 5,962 | $ | 9,489 | $ | 9,779 | $ | 7,623 | $ | 4,983 | ||||||||||||
Cost of sales | 3,769 | 4,926 | 7,836 | 8,291 | 7,391 | 4,067 | ||||||||||||||||||
Gross profit | $ | 737 | $ | 1,036 | $ | 1,653 | $ | 1,488 | $ | 232 | $ | 916 |
Three months ended September 30, | Six months ended September 30, | Three months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Interest income on sales-type leases | $ | 819 | $ | 1,000 | $ | 1,680 | $ | 2,290 | $ | 1,362 | $ | 861 | ||||||||||||
Lease income on operating leases | $ | 4,659 | $ | 6,634 | $ | 9,241 | $ | 11,844 | $ | 2,808 | $ | 4,582 |
Notes | Lease | Financing | Notes | Lease | Financing | |||||||||||||||||||
September 30, 2022 | Receivable | Receivables | Receivables | |||||||||||||||||||||
June 30, 2023 | Receivable | Receivables | Receivables | |||||||||||||||||||||
Gross receivables | $ | 89,717 | $ | 50,714 | $ | 140,431 | $ | 151,336 | $ | 60,660 | $ | 211,996 | ||||||||||||
Unguaranteed residual value (1) | - | 8,385 | 8,385 | - | 8,348 | 8,348 | ||||||||||||||||||
Unearned income | (5,795 | ) | (5,104 | ) | (10,899 | ) | (14,278 | ) | (7,925 | ) | (22,203 | ) | ||||||||||||
Allowance for credit losses (2) | (976 | ) | (1,207 | ) | (2,183 | ) | (696 | ) | (936 | ) | (1,632 | ) | ||||||||||||
Total, net | $ | 82,946 | $ | 52,788 | $ | 135,734 | $ | 136,362 | $ | 60,147 | $ | 196,509 | ||||||||||||
Reported as: | ||||||||||||||||||||||||
Current | $ | 45,443 | $ | 19,567 | $ | 65,010 | $ | 49,674 | $ | 31,437 | $ | 81,111 | ||||||||||||
Long-term | 37,503 | 33,221 | 70,724 | 86,688 | 28,710 | 115,398 | ||||||||||||||||||
Total, net | $ | 82,946 | $ | 52,788 | $ | 135,734 | $ | 136,362 | $ | 60,147 | $ | 196,509 |
(1) | Includes unguaranteed residual values of |
(2) | Refer to Note 7, |
Notes | Lease | Financing | Notes | Lease | Financing | |||||||||||||||||||
March 31, 2022 | Receivable | Receivables | Receivables | |||||||||||||||||||||
March 31, 2023 | Receivable | Receivables | Receivables | |||||||||||||||||||||
Gross receivables | $ | 80,517 | $ | 38,788 | $ | 119,305 | $ | 117,008 | $ | 60,157 | $ | 177,165 | ||||||||||||
Unguaranteed residual value (1) | - | 9,141 | 9,141 | - | 8,161 | 8,161 | ||||||||||||||||||
Unearned income | (2,728 | ) | (3,604 | ) | (6,332 | ) | (5,950 | ) | (8,050 | ) | (14,000 | ) | ||||||||||||
Allowance for credit losses (2) | (708 | ) | (681 | ) | (1,389 | ) | (801 | ) | (981 | ) | (1,782 | ) | ||||||||||||
Total, net | $ | 77,081 | $ | 43,644 | $ | 120,725 | $ | 110,257 | $ | 59,287 | $ | 169,544 | ||||||||||||
Reported as: | ||||||||||||||||||||||||
Current | $ | 45,415 | $ | 16,077 | $ | 61,492 | $ | 65,738 | $ | 24,091 | $ | 89,829 | ||||||||||||
Long-term | 31,666 | 27,567 | 59,233 | 44,519 | 35,196 | 79,715 | ||||||||||||||||||
Total, net | $ | 77,081 | $ | 43,644 | $ | 120,725 | $ | 110,257 | $ | 59,287 | $ | 169,544 |
(1) | Includes unguaranteed residual values of $ |
(2) | Refer to Note 7, “Allowance for Credit Losses” for details. |
September 30, | March 31, | June 30, | March 31, | |||||||||||||
2022 | 2022 | 2023 | 2023 | |||||||||||||
Cost of equipment under operating leases | $ | 14,121 | $ | 13,044 | $ | 16,091 | $ | 15,301 | ||||||||
Accumulated depreciation | (9,752 | ) | (7,985 | ) | (10,825 | ) | (10,599 | ) | ||||||||
Investment in operating lease equipment—net (1) | $ | 4,369 | $ | 5,059 | $ | 5,266 | $ | 4,702 |
(1) | Amounts include estimated unguaranteed residual values of |
5. | LESSEE ACCOUNTING |
6. | GOODWILL AND OTHER INTANGIBLE ASSETS |
Six months ended September 30, 2022 | Technology Segment | Product | Professional Services | Managed Services | Total | |||||||||||||||||||||||||||
Balance March 31, 2023 | ||||||||||||||||||||||||||||||||
Goodwill | $ | 144,778 | $ | - | - | - | 144,778 | |||||||||||||||||||||||||
Accumulated impairment losses | (8,673 | ) | - | - | - | (8,673 | ) | |||||||||||||||||||||||||
Net carrying amount | $ | 136,105 | $ | - | $ | - | $ | - | $ | 136,105 | ||||||||||||||||||||||
Goodwill | Accumulated Impairment Loss | Net Carrying Amount | ||||||||||||||||||||||||||||||
Beginning balance | $ | 135,216 | $ | (8,673 | ) | $ | 126,543 | |||||||||||||||||||||||||
Reporting unit change | (136,105 | ) | 106,497 | 19,712 | 9,896 | - | ||||||||||||||||||||||||||
Acquisitions | 9,694 | - | 9,694 | - | 19,672 | 2,456 | - | 22,128 | ||||||||||||||||||||||||
Impairment losses | - | - | - | - | - | |||||||||||||||||||||||||||
Foreign currency translations | (330 | ) | - | (330 | ) | - | 37 | 7 | 3 | 47 | ||||||||||||||||||||||
Ending balance | $ | 144,580 | $ | (8,673 | ) | $ | 135,907 | |||||||||||||||||||||||||
Balance June 30, 2023 | ||||||||||||||||||||||||||||||||
Goodwill | $ | - | $ | 134,879 | $ | 22,175 | $ | 9,899 | $ | 166,953 | ||||||||||||||||||||||
Accumulated impairment losses | - | (6,787 | ) | (1,256 | ) | (630 | ) | (8,673 | ) | |||||||||||||||||||||||
Net carrying amount | $ | - | $ | 128,092 | $ | 20,919 | $ | 9,269 | $ | 158,280 |
September 30, 2022 | March 31, 2022 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||
Purchased intangibles | $ | 85,218 | $ | (56,425 | ) | $ | 28,793 | $ | 77,224 | $ | (52,087 | ) | $ | 25,137 | $ | 115,463 | $ | (64,897 | ) | $ | 50,566 | $ | 85,449 | $ | (61,376 | ) | $ | 24,073 | ||||||||||||||||||||
Capitalized software development | 10,516 | (8,973 | ) | 1,543 | 10,517 | (8,404 | ) | 2,113 | 10,516 | (9,829 | ) | 687 | 10,516 | (9,544 | ) | 972 | ||||||||||||||||||||||||||||||||
Total | $ | 95,734 | $ | (65,398 | ) | $ | 30,336 | $ | 87,741 | $ | (60,491 | ) | $ | 27,250 | $ | 125,979 | $ | (74,726 | ) | $ | 51,253 | $ | 95,965 | $ | (70,920 | ) | $ | 25,045 |
7. | 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 | 943 | 269 | 527 | 1,739 | ||||||||||||
Write-offs and other | (71 | ) | (1 | ) | (1 | ) | (73 | ) | ||||||||
Balance September 30, 2022 | $ | 3,283 | $ | 976 | $ | 1,207 | $ | 5,466 |
Accounts Receivable | Notes Receivable | Lease Receivables | Total | |||||||||||||
Balance April 1, 2021 | $ | 2,064 | $ | 1,212 | $ | 1,171 | $ | 4,447 | ||||||||
Provision for credit losses | 116 | 479 | (497 | ) | 98 | |||||||||||
Write-offs and other | (64 | ) | (4 | ) | (2 | ) | (70 | ) | ||||||||
Balance September 30, 2021 | $ | 2,116 | $ | 1,687 | $ | 672 | $ | 4,475 |
Accounts Receivable | Notes Receivable | Lease Receivables | Total | |||||||||||||
Balance April 1, 2023 | $ | 2,572 | $ | 801 | $ | 981 | $ | 4,354 | ||||||||
Provision for credit losses | 629 | (106 | ) | (45 | ) | 478 | ||||||||||
Write-offs and other | (13 | ) | 1 | - | (12 | ) | ||||||||||
Balance June 30, 2023 | $ | 3,188 | $ | 696 | $ | 936 | $ | 4,820 |
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 | ) | - | - | (65 | ) | ||||||||||
Balance June 30, 2022 | $ | 2,728 | $ | 792 | $ | 913 | $ | 4,433 |
• | 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 |
• | 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 |
Amortized cost basis by origination year ending March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost basis by origination year ending March 31, | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 and prior | Total | Transfers (2) | Net credit exposure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | 2018 | Total | Non-recourse debt (2) | Net credit exposure | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes receivable: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 37,200 | $ | 14,436 | $ | 18,494 | $ | 791 | $ | 452 | $ | - | $ | 71,373 | $ | (16,450 | ) | $ | 54,923 | $ | 67,836 | $ | 36,270 | $ | 13,539 | $ | 3,428 | $ | 142 | $ | 1 | $ | 121,216 | $ | (14,619 | ) | $ | 106,597 | ||||||||||||||||||||||||||||||||||
Average CQR | 8,039 | 2,655 | 1,220 | 508 | 123 | 4 | 12,549 | (493 | ) | 12,056 | 4,871 | 9,695 | 1,096 | 96 | 58 | 26 | 15,842 | (2,068 | ) | 13,774 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 45,239 | $ | 17,091 | $ | 19,714 | $ | 1,299 | $ | 575 | $ | 4 | $ | 83,922 | $ | (16,943 | ) | $ | 66,979 | $ | 72,707 | $ | 45,965 | $ | 14,635 | $ | 3,524 | $ | 200 | $ | 27 | $ | 137,058 | $ | (16,687 | ) | $ | 120,371 | ||||||||||||||||||||||||||||||||||
Lease receivables: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 11,271 | $ | 5,513 | $ | 2,879 | $ | 2,754 | $ | 317 | $ | 32 | $ | 22,766 | $ | (1,965 | ) | $ | 20,801 | $ | 7,378 | $ | 16,566 | $ | 3,595 | $ | 1,775 | $ | 432 | $ | 133 | $ | 29,879 | $ | (1,665 | ) | $ | 28,214 | ||||||||||||||||||||||||||||||||||
Average CQR | 16,625 | 7,802 | 1,584 | 330 | 33 | 25 | 26,399 | (1,248 | ) | 25,151 | 6,218 | 16,547 | 3,316 | 572 | 63 | - | 26,716 | (4,049 | ) | 22,667 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 27,896 | $ | 13,315 | $ | 4,463 | $ | 3,084 | $ | 350 | $ | 57 | $ | 49,165 | $ | (3,213 | ) | $ | 45,952 | $ | 13,596 | $ | 33,113 | $ | 6,911 | $ | 2,347 | $ | 495 | $ | 133 | $ | 56,595 | $ | (5,714 | ) | $ | 50,881 | ||||||||||||||||||||||||||||||||||
Total amortized cost (1) | $ | 73,135 | $ | 30,406 | $ | 24,177 | $ | 4,383 | $ | 925 | $ | 61 | $ | 133,087 | $ | (20,156 | ) | $ | 112,931 | $ | 86,303 | $ | 79,078 | $ | 21,546 | $ | 5,871 | $ | 695 | $ | 160 | $ | 193,653 | $ | (22,401 | ) | $ | 171,252 |
(1) |
(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 | - | 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 |
Amortized cost basis by origination year ending March 31, | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | 2018 and prior | Total | Transfers (2) | Net credit exposure | ||||||||||||||||||||||||||||
Notes receivable: | ||||||||||||||||||||||||||||||||||||
High CQR | $ | 72,155 | $ | 11,378 | $ | 11,267 | $ | 370 | $ | 30 | $ | - | $ | 95,200 | $ | (28,115 | ) | $ | 67,085 | |||||||||||||||||
Average CQR | 12,793 | 2,675 | 213 | 115 | 61 | 1 | 15,858 | (1,432 | ) | 14,426 | ||||||||||||||||||||||||||
Total | $ | 84,948 | $ | 14,053 | $ | 11,480 | $ | 485 | $ | 91 | $ | 1 | $ | 111,058 | $ | (29,547 | ) | $ | 81,511 | |||||||||||||||||
Lease receivables: | ||||||||||||||||||||||||||||||||||||
High CQR | $ | 21,629 | $ | 3,842 | $ | 1,916 | $ | 565 | $ | 51 | $ | 9 | $ | 28,012 | $ | (1,437 | ) | $ | 26,575 | |||||||||||||||||
Average CQR | 23,796 | 3,430 | 770 | 35 | 3 | - | 28,034 | (1,594 | ) | 26,440 | ||||||||||||||||||||||||||
Total | $ | 45,425 | $ | 7,272 | $ | 2,686 | $ | 600 | $ | 54 | $ | 9 | $ | 56,046 | $ | (3,031 | ) | $ | 53,015 | |||||||||||||||||
Total amortized cost (1) | $ | 130,373 | $ | 21,325 | $ | 14,166 | $ | 1,085 | $ | 145 | $ | 10 | $ | 167,104 | $ | (32,578 | ) | $ | 134,526 |
(1) |
(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 | $ | 77,509 | $ | 83,922 | $ | 748 | $ | 113 | $ | 1,093 | $ | 1,954 | $ | 7,750 | $ | 9,704 | $ | 127,354 | $ | 137,058 | ||||||||||||||||||||||||||||||||
Lease receivables | 240 | 154 | 551 | 945 | 905 | 1,850 | 47,315 | 49,165 | 250 | 367 | 902 | 1,519 | 3,771 | 5,290 | 51,305 | 56,595 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 508 | $ | 579 | $ | 648 | $ | 1,735 | $ | 6,528 | $ | 8,263 | $ | 124,824 | $ | 133,087 | $ | 998 | $ | 480 | $ | 1,995 | $ | 3,473 | $ | 11,521 | $ | 14,994 | $ | 178,659 | $ | 193,653 |
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 | $ | 187 | $ | 37 | $ | 23 | $ | 247 | $ | 5,307 | $ | 5,554 | $ | 72,235 | $ | 77,789 | $ | 1,020 | $ | 862 | $ | 473 | $ | 2,355 | $ | 7,703 | $ | 10,058 | $ | 101,000 | $ | 111,058 | ||||||||||||||||||||||||||||||||
Lease receivables | 115 | 325 | 430 | 870 | 639 | 1,509 | 36,392 | 37,901 | 1,068 | 463 | 864 | 2,395 | 5,413 | 7,808 | 48,238 | 56,046 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 302 | $ | 362 | $ | 453 | $ | 1,117 | $ | 5,946 | $ | 7,063 | $ | 108,627 | $ | 115,690 | $ | 2,088 | $ | 1,325 | $ | 1,337 | $ | 4,750 | $ | 13,116 | $ | 17,866 | $ | 149,238 | $ | 167,104 |
8. | NOTES PAYABLE AND CREDIT FACILITY |
9. | COMMITMENTS AND CONTINGENCIES |
10. | EARNINGS PER SHARE |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Net earnings attributable to common shareholders - basic and diluted | $ | 28,469 | $ | 31,413 | $ | 50,808 | $ | 54,931 | $ | 33,847 | $ | 22,339 | ||||||||||||
Basic and diluted common shares outstanding: | ||||||||||||||||||||||||
Basic and diluted common shares outstanding: | ||||||||||||||||||||||||
Weighted average common shares outstanding — basic | 26,578 | 26,664 | 26,546 | 26,666 | 26,552 | 26,513 | ||||||||||||||||||
Effect of dilutive shares | 45 | 200 | 125 | 196 | 96 | 172 | ||||||||||||||||||
Weighted average shares common outstanding — diluted | 26,623 | 26,864 | 26,671 | 26,862 | 26,648 | 26,685 | ||||||||||||||||||
Earnings per common share - basic | $ | 1.07 | $ | 1.18 | $ | 1.91 | $ | 2.06 | $ | 1.27 | $ | 0.84 | ||||||||||||
Earnings per common share - diluted | $ | 1.07 | $ | 1.17 | $ | 1.91 | $ | 2.04 | $ | 1.27 | $ | 0.84 |
11. | STOCKHOLDERS’ EQUITY |
12. | 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 | |||||||||||||
Nonvested April 1, 2023 | 314,860 | $ | 49.57 | |||||||||||||
Granted | 154,597 | $ | 56.82 | 153,727 | $ | 55.88 | ||||||||||
Vested | (177,360 | ) | $ | 39.44 | (152,477 | ) | $ | 46.10 | ||||||||
Forfeited | (6,399 | ) | $ | 41.51 | (961 | ) | $ | 54.89 | ||||||||
Nonvested September 30, 2022 | 314,644 | $ | 49.58 | |||||||||||||
Nonvested June 30, 2023 | 315,149 | $ | 54.31 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Equity-based compensation expense | $ | 2,205 | $ | 1,773 | ||||
Income tax benefit | (600 | ) | (496 | ) |
13. | INCOME TAXES |
14. | 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) | |||||||||||||||||||||||||
September 30, 2022 | ||||||||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 10,204 | $ | 10,204 | $ | - | $ | - | $ | 22,225 | $ | 22,225 | $ | - | $ | - | ||||||||||||||||
March 31, 2022 | ||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 18,138 | $ | 18,138 | $ | - | $ | - | $ | 8,880 | $ | 8,880 | $ | - | $ | - |
15. | BUSINESS COMBINATIONS |
Acquisition Date Amount | ||||
Accounts receivable | $ | 4,033 | ||
Other assets | 129 | |||
Identified intangible assets | 8,360 | |||
Accounts payable and other current liabilities | (8,714 | ) | ||
Contract liabilities | (214 | ) | ||
Total identifiable net assets | 3,594 | |||
Goodwill | 9,694 | |||
Total purchase consideration | $ | 13,288 |
Acquisition Date Amount | ||||
Accounts receivable | $ | 20,419 | ||
Other assets | 1,940 | |||
Identified intangible assets | 29,960 | |||
Accounts payable and other liabilities | (24,758 | ) | ||
Contract liabilities | (1,086 | ) | ||
Total identifiable net assets | 26,475 | |||
Goodwill | 22,128 | |||
Total purchase consideration | $ | 48,603 |
16. | SEGMENT REPORTING |
Three Months Ended | ||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Product | $ | 406,317 | $ | 22,228 | $ | 428,545 | $ | 375,444 | $ | 21,716 | $ | 397,160 | ||||||||||||
Service | 65,161 | - | 65,161 | 60,857 | - | 60,857 | ||||||||||||||||||
Total | 471,478 | 22,228 | 493,706 | 436,301 | 21,716 | 458,017 | ||||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Product | 311,928 | 5,199 | 317,127 | 293,837 | 3,792 | 297,629 | ||||||||||||||||||
Service | 43,275 | - | 43,275 | 37,386 | - | 37,386 | ||||||||||||||||||
Total | 355,203 | 5,199 | 360,402 | 331,223 | 3,792 | 335,015 | ||||||||||||||||||
Gross Profit | 116,275 | 17,029 | 133,304 | 105,078 | 17,924 | 123,002 | ||||||||||||||||||
Selling, general, and administrative | 80,161 | 4,543 | 84,704 | 70,803 | 3,701 | 74,504 | ||||||||||||||||||
Depreciation and amortization | 3,540 | 28 | 3,568 | 3,825 | 28 | 3,853 | ||||||||||||||||||
Interest and financing costs | 671 | 254 | 925 | 199 | 143 | 342 | ||||||||||||||||||
Operating expenses | 84,372 | 4,825 | 89,197 | 74,827 | 3,872 | 78,699 | ||||||||||||||||||
Operating income | 31,903 | 12,204 | 44,107 | 30,251 | 14,052 | 44,303 | ||||||||||||||||||
Other income (expense) | (3,866 | ) | (325 | ) | ||||||||||||||||||||
Earnings before tax | $ | 40,241 | $ | 43,978 | ||||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Contracts with customers | $ | 466,972 | $ | 6,923 | $ | 473,895 | $ | 430,339 | $ | 1,776 | $ | 432,115 | ||||||||||||
Financing and other | 4,506 | 15,305 | 19,811 | 5,962 | 19,940 | 25,902 | ||||||||||||||||||
Total | $ | 471,478 | $ | 22,228 | $ | 493,706 | $ | 436,301 | $ | 21,716 | $ | 458,017 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 3,871 | $ | 1,196 | $ | 5,067 | $ | 4,074 | $ | 1,888 | $ | 5,962 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 611 | $ | 22 | $ | 633 | $ | 948 | $ | 8,301 | $ | 9,249 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 1,167,532 | $ | 203,808 | $ | 1,371,340 | $ | 902,070 | $ | 237,875 | $ | 1,139,945 |
Six Months Ended | ||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Product | $ | 791,993 | $ | 31,802 | $ | 823,795 | $ | 720,210 | $ | 38,007 | $ | 758,217 | ||||||||||||
Service | 128,270 | - | 128,270 | 116,449 | - | 116,449 | ||||||||||||||||||
Total | 920,263 | 31,802 | 952,065 | 836,659 | 38,007 | 874,666 | ||||||||||||||||||
Cost of Sales | ||||||||||||||||||||||||
Product | 614,436 | 6,901 | 621,337 | 564,852 | 10,004 | 574,856 | ||||||||||||||||||
Service | 83,901 | - | 83,901 | 71,296 | - | 71,296 | ||||||||||||||||||
Total | 698,337 | 6,901 | 705,238 | 636,148 | 10,004 | 646,152 | ||||||||||||||||||
Gross Profit | 221,926 | 24,901 | 246,827 | 200,511 | 28,003 | 228,514 | ||||||||||||||||||
Selling, general, and administrative | 153,273 | 8,198 | 161,471 | 136,956 | 6,323 | 143,279 | ||||||||||||||||||
Depreciation and amortization | 6,722 | 56 | 6,778 | 7,723 | 56 | 7,779 | ||||||||||||||||||
Interest and financing costs | 809 | 479 | 1,288 | 358 | 343 | 701 | ||||||||||||||||||
Operating expenses | 160,804 | 8,733 | 169,537 | 145,037 | 6,722 | 151,759 | ||||||||||||||||||
Operating income | 61,122 | 16,168 | 77,290 | 55,474 | 21,281 | 76,755 | ||||||||||||||||||
Other income (expense) | (6,019 | ) | (202 | ) | ||||||||||||||||||||
Earnings before tax | $ | 71,271 | $ | 76,553 | ||||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Contracts with customers | $ | 910,774 | $ | 7,868 | $ | 918,642 | $ | 826,880 | $ | 7,194 | $ | 834,074 | ||||||||||||
Financing and other | 9,489 | 23,934 | 33,423 | 9,779 | 30,813 | 40,592 | ||||||||||||||||||
Total | $ | 920,263 | $ | 31,802 | $ | 952,065 | $ | 836,659 | $ | 38,007 | $ | 874,666 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 7,386 | $ | 2,153 | $ | 9,539 | $ | 8,177 | $ | 3,867 | $ | 12,044 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 1,897 | $ | 513 | $ | 2,410 | $ | 2,255 | $ | 13,988 | $ | 16,243 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 1,167,532 | $ | 203,808 | $ | 1,371,340 | $ | 902,070 | $ | 237,875 | $ | 1,139,945 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Net Sales | ||||||||
Product | $ | 498,166 | $ | 385,676 | ||||
Professional Services | 35,556 | 37,168 | ||||||
Managed Services | 31,963 | 25,941 | ||||||
Financing | 8,490 | 9,574 | ||||||
Total | 574,175 | 458,359 | ||||||
Gross Profit | ||||||||
Product | 111,391 | 83,168 | ||||||
Professional Services | 14,724 | 15,055 | ||||||
Managed Services | 9,797 | 7,428 | ||||||
Financing | 6,361 | 7,872 | ||||||
Total | 142,273 | 113,523 | ||||||
Operating income | ||||||||
Technology Business | 43,498 | 29,219 | ||||||
Financing | 2,834 | 3,964 | ||||||
Total | 46,332 | 33,183 | ||||||
Other income (expense), net | 190 | (2,153 | ) | |||||
Earnings before tax | $ | 46,522 | $ | 31,030 | ||||
Depreciation and amortization | ||||||||
Technology Business | $ | 4,764 | $ | 3,182 | ||||
Financing | 28 | 28 | ||||||
Total | $ | 4,792 | $ | 3,210 | ||||
Interest and financing costs | ||||||||
Technology Business | $ | 550 | $ | 138 | ||||
Financing | 301 | 225 | ||||||
Total | $ | 851 | $ | 363 | ||||
Selected Financial Data - Statement of Cash Flow | ||||||||
Purchases of property, equipment and operating lease equipment Technology Business | $ | 2,785 | $ | 1,286 | ||||
Financing | 913 | 491 | ||||||
Total | $ | 3,698 | $ | 1,777 |
Three months ended June 30, 2023 | ||||||||||||||||||||
Product | Professional Services | Managed Services | Financing | Total | ||||||||||||||||
Net Sales | ||||||||||||||||||||
Contracts with customers | $ | 490,543 | $ | 35,556 | $ | 31,963 | $ | 1,290 | $ | 559,352 | ||||||||||
Financing and other | 7,623 | - | - | 7,200 | 14,823 | |||||||||||||||
Total | $ | 498,166 | $ | 35,556 | $ | 31,963 | $ | 8,490 | $ | 574,175 | ||||||||||
Timing and position as principal or agent | ||||||||||||||||||||
Transferred at a point in time as principal | $ | 452,382 | $ | - | $ | - | $ | 1,290 | $ | 453,672 | ||||||||||
Transferred at a point in time as agent | 38,161 | - | - | - | 38,161 | |||||||||||||||
Transferred over time as principal | - | 35,556 | 31,963 | - | 67,519 | |||||||||||||||
Total revenue from contracts with customers | $ | 490,543 | $ | 35,556 | $ | 31,963 | $ | 1,290 | $ | 559,352 |
Three months ended June 30, 2022 | ||||||||||||||||||||
Product | Professional Services | Managed Services | Financing | Total | ||||||||||||||||
Net Sales | ||||||||||||||||||||
Contracts with customers | $ | 380,693 | $ | 37,168 | $ | 25,941 | $ | 945 | $ | 444,747 | ||||||||||
Financing and other | 4,983 | - | - | 8,629 | 13,612 | |||||||||||||||
Total | $ | 385,676 | $ | 37,168 | $ | 25,941 | $ | 9,574 | $ | 458,359 | ||||||||||
Timing and position as principal or agent | ||||||||||||||||||||
Transferred at a point in time as principal | $ | 335,714 | $ | - | $ | - | $ | 945 | $ | 336,659 | ||||||||||
Transferred at a point in time as agent | 44,979 | - | - | - | 44,979 | |||||||||||||||
Transferred over time as principal | - | 37,168 | 25,941 | - | 63,109 | |||||||||||||||
Total revenue from contracts with customers | $ | 380,693 | $ | 37,168 | $ | 25,941 | $ | 945 | $ | 444,747 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Customer end market: | ||||||||||||||||
Telecom, media & entertainment | $ | 118,454 | $ | 115,784 | $ | 246,731 | $ | 227,976 | ||||||||
Technology | 96,160 | 53,752 | 166,021 | 122,892 | ||||||||||||
Healthcare | 66,959 | 88,237 | 135,471 | 142,925 | ||||||||||||
State and local government and educational institutions | 70,491 | 68,662 | 135,092 | 134,077 | ||||||||||||
Financial services | 37,611 | 37,036 | 70,910 | 67,047 | ||||||||||||
All others | 81,803 | 72,830 | 166,038 | 141,742 | ||||||||||||
Net sales | 471,478 | 436,301 | 920,263 | 836,659 | ||||||||||||
Less: Revenue from financing and other | (4,506 | ) | (5,962 | ) | (9,489 | ) | (9,779 | ) | ||||||||
Revenue from contracts with customers | $ | 466,972 | $ | 430,339 | $ | 910,774 | $ | 826,880 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Vendor: | ||||||||||||||||
Cisco systems | $ | 185,318 | $ | 174,072 | $ | 342,196 | $ | 340,974 | ||||||||
Juniper networks | 39,580 | 18,438 | 62,089 | 43,152 | ||||||||||||
HPE | 32,330 | 8,965 | 39,129 | 21,301 | ||||||||||||
NetApp | 16,710 | 29,536 | 30,695 | 39,993 | ||||||||||||
Dell EMC | 15,221 | 43,498 | 77,094 | 69,838 | ||||||||||||
Arista networks | 8,933 | 8,047 | 20,105 | 19,545 | ||||||||||||
All others | 173,386 | 153,745 | 348,955 | 301,856 | ||||||||||||
Net sales | 471,478 | 436,301 | 920,263 | 836,659 | ||||||||||||
Less: Revenue from financing and other | (4,506 | ) | (5,962 | ) | (9,489 | ) | (9,779 | ) | ||||||||
Revenue from contracts with customers | $ | 466,972 | $ | 430,339 | $ | 910,774 | $ | 826,880 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Customer end market: | ||||||||
Telecom, media & entertainment | $ | 141,335 | $ | 128,277 | ||||
SLED | 109,405 | 64,602 | ||||||
Healthcare | 86,656 | 68,512 | ||||||
Technology | 73,403 | 69,862 | ||||||
Financial services | 65,690 | 33,299 | ||||||
All others | 89,196 | 84,233 | ||||||
Net sales | 565,685 | 448,785 | ||||||
Less: revenue from financing and other | (7,623 | ) | (4,983 | ) | ||||
Total revenue from contracts with customers | $ | 558,062 | $ | 443,802 | ||||
Type: | ||||||||
Product | ||||||||
Networking | $ | 245,188 | $ | 142,641 | ||||
Cloud | 172,044 | 164,733 | ||||||
Security | 45,796 | 47,995 | ||||||
Collaboration | 12,956 | 12,980 | ||||||
Other | 22,182 | 17,327 | ||||||
Total product | 498,166 | 385,676 | ||||||
Professional services | 35,556 | 37,168 | ||||||
Managed services | 31,963 | 25,941 | ||||||
Net sales | 565,685 | 448,785 | ||||||
Less: revenue from financing and other | (7,623 | ) | (4,983 | ) | ||||
Total revenue from contracts with customers | $ | 558,062 | $ | 443,802 |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended June 30, | ||||||||||||||||||||||
Consolidated | 2022 | 2021 | 2022 | 2021 | 2023 | 2022 | ||||||||||||||||||
Financial Metrics | ||||||||||||||||||||||||
Net sales | $ | 493,706 | $ | 458,017 | $ | 952,065 | $ | 874,666 | $ | 574,175 | $ | 458,359 | ||||||||||||
Gross profit | $ | 133,304 | $ | 123,002 | $ | 246,827 | $ | 228,514 | $ | 142,273 | $ | 113,523 | ||||||||||||
Gross margin | 27.0 | % | 26.9 | % | 25.9 | % | 26.1 | % | 24.8 | % | 24.8 | % | ||||||||||||
Operating income margin | 8.9 | % | 9.7 | % | 8.1 | % | 8.8 | % | 8.1 | % | 7.2 | % | ||||||||||||
Net earnings | $ | 28,469 | $ | 31,413 | $ | 50,808 | $ | 54,931 | $ | 33,847 | $ | 22,339 | ||||||||||||
Net earnings margin | 5.8 | % | 6.9 | % | 5.3 | % | 6.3 | % | 5.9 | % | 4.9 | % | ||||||||||||
Net earnings per common share - diluted | $ | 1.07 | $ | 1.17 | $ | 1.91 | $ | 2.04 | $ | 1.27 | $ | 0.84 | ||||||||||||
Non-GAAP Financial Metrics | ||||||||||||||||||||||||
Non-GAAP: Net earnings (1) | $ | 34,396 | $ | 34,806 | $ | 60,909 | $ | 61,159 | $ | 37,687 | $ | 26,513 | ||||||||||||
Non-GAAP: Net earnings per common share - diluted (1) | $ | 1.29 | $ | 1.30 | $ | 2.28 | $ | 2.28 | $ | 1.41 | $ | 0.99 | ||||||||||||
Adjusted EBITDA (2) | $ | 50,304 | $ | 50,195 | $ | 88,608 | $ | 88,467 | $ | 53,879 | $ | 38,304 | ||||||||||||
Adjusted EBITDA margin | 10.2 | % | 11.0 | % | 9.3 | % | 10.1 | % | 9.4 | % | 8.4 | % | ||||||||||||
Technology Business | ||||||||||||||||||||||||
Technology Segment | ||||||||||||||||||||||||
Financial Metrics | ||||||||||||||||||||||||
Net sales | $ | 471,478 | $ | 436,301 | $ | 920,263 | $ | 836,659 | $ | 565,685 | $ | 448,785 | ||||||||||||
Adjusted gross billings (3) | $ | 765,762 | $ | 664,124 | $ | 1,467,705 | $ | 1,297,131 | ||||||||||||||||
Gross profit | $ | 116,275 | $ | 105,078 | $ | 221,926 | $ | 200,511 | $ | 135,912 | $ | 105,651 | ||||||||||||
Gross margin | 24.7 | % | 24.1 | % | 24.1 | % | 24.0 | % | 24.0 | % | 23.5 | % | ||||||||||||
Operating income | $ | 31,903 | $ | 30,251 | $ | 61,122 | $ | 55,474 | $ | 43,498 | $ | 29,219 | ||||||||||||
Non-GAAP Financial Metric | ||||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 38,012 | $ | 36,059 | $ | 72,266 | $ | 67,017 | $ | 50,949 | $ | 34,254 | ||||||||||||
Operational Metric | ||||||||||||||||||||||||
Gross billings (3) | ||||||||||||||||||||||||
Cloud | $ | 258,924 | $ | 253,337 | ||||||||||||||||||||
Networking | 276,645 | 165,626 | ||||||||||||||||||||||
Security | 147,343 | 145,349 | ||||||||||||||||||||||
Collaboration | 22,161 | 34,775 | ||||||||||||||||||||||
Other | 69,761 | 49,009 | ||||||||||||||||||||||
Product gross billings | 774,834 | 648,096 | ||||||||||||||||||||||
Service gross billings | 67,136 | 68,167 | ||||||||||||||||||||||
Total gross billings | $ | 841,970 | 716,263 | |||||||||||||||||||||
Financing Segment | ||||||||||||||||||||||||
Financial Metrics | ||||||||||||||||||||||||
Net sales | $ | 22,228 | $ | 21,716 | $ | 31,802 | $ | 38,007 | $ | 8,490 | $ | 9,574 | ||||||||||||
Gross profit | $ | 17,029 | $ | 17,924 | $ | 24,901 | $ | 28,003 | $ | 6,361 | $ | 7,872 | ||||||||||||
Operating income | $ | 12,204 | $ | 14,052 | $ | 16,168 | $ | 21,281 | $ | 2,834 | $ | 3,964 | ||||||||||||
Non-GAAP Financial Metric | ||||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 12,292 | $ | 14,136 | $ | 16,342 | $ | 21,450 | $ | 2,930 | $ | 4,050 |
(1) |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
GAAP: Earnings before tax | $ | 40,241 | $ | 43,978 | $ | 71,271 | $ | 76,553 | ||||||||
Share based compensation | 1,958 | 1,840 | 3,731 | 3,575 | ||||||||||||
Acquisition related amortization expense | 2,494 | 2,661 | 4,677 | 5,357 | ||||||||||||
Other expense | 3,866 | 325 | 6,019 | 202 | ||||||||||||
Non-GAAP: Earnings before provision for income taxes | 48,559 | 48,804 | 85,698 | 85,687 | ||||||||||||
GAAP: Provision for income taxes | 11,772 | 12,565 | 20,463 | 21,622 | ||||||||||||
Share based compensation | 572 | 528 | 1,080 | 1,024 | ||||||||||||
Acquisition related amortization expense | 720 | 750 | 1,337 | 1,507 | ||||||||||||
Other expense | 1,128 | 93 | 1,744 | 58 | ||||||||||||
Tax benefit (expense) on restricted stock | (29 | ) | 62 | 165 | 317 | |||||||||||
Non-GAAP: Provision for income taxes | 14,163 | 13,998 | 24,789 | 24,528 | ||||||||||||
Non-GAAP: Net earnings | $ | 34,396 | $ | 34,806 | $ | 60,909 | $ | 61,159 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
GAAP: Net earnings per common share - diluted | $ | 1.07 | $ | 1.17 | $ | 1.91 | $ | 2.04 | ||||||||
Share based compensation | 0.05 | 0.05 | 0.09 | 0.10 | ||||||||||||
Acquisition related amortization expense | 0.07 | 0.07 | 0.13 | 0.14 | ||||||||||||
Other expense | 0.10 | 0.01 | 0.16 | 0.01 | ||||||||||||
Tax expense on restricted stock | - | - | (0.01 | ) | (0.01 | ) | ||||||||||
Total non-GAAP adjustments - net of tax | 0.22 | 0.13 | 0.37 | 0.24 | ||||||||||||
Non-GAAP: Net earnings per common share - diluted | $ | 1.29 | $ | 1.30 | $ | 2.28 | $ | 2.28 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
GAAP: Earnings before tax | $ | 46,522 | $ | 31,030 | ||||
Share based compensation | 2,205 | 1,773 | ||||||
Acquisition related amortization expense | 3,469 | 2,183 | ||||||
Other (income) expense | (190 | ) | 2,153 | |||||
Non-GAAP: Earnings before provision for income taxes | 52,006 | 37,139 | ||||||
GAAP: Provision for income taxes | 12,675 | 8,691 | ||||||
Share based compensation | 607 | 508 | ||||||
Acquisition related amortization expense | 952 | 617 | ||||||
Other (income) expense | (52 | ) | 616 | |||||
Tax benefit (expense) on restricted stock | 137 | 194 | ||||||
Non-GAAP: Provision for income taxes | 14,319 | 10,626 | ||||||
Non-GAAP: Net earnings | $ | 37,687 | $ | 26,513 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
GAAP: Net earnings per common share - diluted | $ | 1.27 | $ | 0.84 | ||||
Share based compensation | 0.06 | 0.04 | ||||||
Acquisition and integration expense | - | - | ||||||
Acquisition related amortization expense | 0.09 | 0.06 | ||||||
Other (income) expense | - | 0.06 | ||||||
Tax benefit (expense) on restricted stock | (0.01 | ) | (0.01 | ) | ||||
Total non-GAAP adjustments - net of tax | 0.14 | 0.15 | ||||||
Non-GAAP: Net earnings per common share - diluted | $ | 1.41 | $ | 0.99 |
(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 September 30, | Six Months Ended September 30, | Three Months Ended June 30, | ||||||||||||||||||||||
Consolidated | 2022 | 2021 | 2022 | 2021 | 2023 | 2022 | ||||||||||||||||||
Net earnings | $ | 28,469 | $ | 31,413 | $ | 50,808 | $ | 54,931 | $ | 33,847 | $ | 22,339 | ||||||||||||
Provision for income taxes | 11,772 | 12,565 | 20,463 | 21,622 | 12,675 | 8,691 | ||||||||||||||||||
Share based compensation | 1,958 | 1,840 | 3,731 | 3,575 | 2,205 | 1,773 | ||||||||||||||||||
Interest and financing costs | 671 | 199 | 809 | 358 | 550 | 138 | ||||||||||||||||||
Depreciation and amortization | 3,568 | 3,853 | 6,778 | 7,779 | 4,792 | 3,210 | ||||||||||||||||||
Other income | 3,866 | 325 | 6,019 | 202 | ||||||||||||||||||||
Other income (expense) | (190 | ) | 2,153 | |||||||||||||||||||||
Adjusted EBITDA | $ | 50,304 | $ | 50,195 | $ | 88,608 | $ | 88,467 | $ | 53,879 | $ | 38,304 | ||||||||||||
Technology Segment | ||||||||||||||||||||||||
Technology Business | ||||||||||||||||||||||||
Operating income | $ | 31,903 | $ | 30,251 | $ | 61,122 | $ | 55,474 | $ | 43,498 | $ | 29,219 | ||||||||||||
Depreciation and amortization | 3,540 | 3,825 | 6,722 | 7,723 | 4,764 | 3,182 | ||||||||||||||||||
Share based compensation | 1,898 | 1,784 | 3,613 | 3,462 | 2,137 | 1,715 | ||||||||||||||||||
Interest and financing costs | 671 | 199 | 809 | 358 | 550 | 138 | ||||||||||||||||||
Adjusted EBITDA | $ | 38,012 | $ | 36,059 | $ | 72,266 | $ | 67,017 | $ | 50,949 | $ | 34,254 | ||||||||||||
Financing Segment | ||||||||||||||||||||||||
Operating income | $ | 12,204 | $ | 14,052 | $ | 16,168 | $ | 21,281 | $ | 2,834 | $ | 3,964 | ||||||||||||
Depreciation and amortization | 28 | 28 | 56 | 56 | 28 | 28 | ||||||||||||||||||
Share based compensation | 60 | 56 | 118 | 113 | 68 | 58 | ||||||||||||||||||
Adjusted EBITDA | $ | 12,292 | $ | 14,136 | $ | 16,342 | $ | 21,450 | $ | 2,930 | $ | 4,050 |
(3) |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Technology segment net sales | $ | 471,478 | $ | 436,301 | $ | 920,263 | $ | 836,659 | ||||||||
Costs incurred related to sales of third party maintenance, software assurance and subscription/SaaS licenses, and services | 294,284 | 227,823 | 547,442 | $ | 460,472 | |||||||||||
Adjusted gross billings | $ | 765,762 | $ | 664,124 | $ | 1,467,705 | $ | 1,297,131 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net sales | ||||||||||||||||
Product | $ | 406,317 | $ | 375,444 | $ | 791,993 | $ | 720,210 | ||||||||
Services | 65,161 | 60,857 | 128,270 | 116,449 | ||||||||||||
Total | 471,478 | 436,301 | 920,263 | 836,659 | ||||||||||||
Cost of sales | ||||||||||||||||
Product | 311,928 | 293,837 | 614,436 | 564,852 | ||||||||||||
Services | 43,275 | 37,386 | 83,901 | 71,296 | ||||||||||||
Total | 355,203 | 331,223 | 698,337 | 636,148 | ||||||||||||
Gross profit | 116,275 | 105,078 | 221,926 | 200,511 | ||||||||||||
Selling, general, and administrative | 80,161 | 70,803 | 153,273 | 136,956 | ||||||||||||
Depreciation and amortization | 3,540 | 3,825 | 6,722 | 7,723 | ||||||||||||
Interest and financing costs | 671 | 199 | 809 | 358 | ||||||||||||
Operating expenses | 84,372 | 74,827 | 160,804 | 145,037 | ||||||||||||
Operating income | $ | 31,903 | $ | 30,251 | $ | 61,122 | $ | 55,474 | ||||||||
Adjusted gross billings | $ | 765,762 | $ | 664,124 | $ | 1,467,705 | $ | 1,297,131 | ||||||||
Adjusted EBITDA | $ | 38,012 | $ | 36,059 | $ | 72,266 | $ | 67,017 |
Three Months Ended June 30, | ||||||||||||||||
2023 | 2022 | Change | Percent Change | |||||||||||||
Financial Metrics | ||||||||||||||||
Net sales | ||||||||||||||||
Product | $ | 498,166 | $ | 385,676 | $ | 112,490 | 29.2 | % | ||||||||
Professional Services | 35,556 | 37,168 | (1,612 | ) | (4.3 | %) | ||||||||||
Managed Services | 31,963 | 25,941 | 6,022 | 23.2 | % | |||||||||||
Total | 565,685 | 448,785 | 116,900 | 26.0 | % | |||||||||||
Gross Profit | ||||||||||||||||
Product | 111,391 | 83,168 | 28,223 | 33.9 | % | |||||||||||
Professional Services | 14,724 | 15,055 | (331 | ) | (2.2 | %) | ||||||||||
Managed Services | 9,797 | 7,428 | 2,369 | 31.9 | % | |||||||||||
Total | 135,912 | 105,651 | 30,261 | 28.6 | % | |||||||||||
Selling, general, and administrative | 87,100 | 73,112 | 13,988 | 19.1 | % | |||||||||||
Depreciation and amortization | 4,764 | 3,182 | 1,582 | 49.7 | % | |||||||||||
Interest and financing costs | 550 | 138 | 412 | 298.6 | % | |||||||||||
Operating expenses | 92,414 | 76,432 | 15,982 | 20.9 | % | |||||||||||
Operating income | $ | 43,498 | $ | 29,219 | $ | 14,279 | 48.9 | % | ||||||||
Key Metrics & Other Information | ||||||||||||||||
Gross billings | $ | 841,970 | $ | 716,263 | $ | 125,707 | 17.6 | % | ||||||||
Adjusted EBITDA | $ | 50,949 | $ | 34,254 | $ | 16,695 | 48.7 | % | ||||||||
Product margin | 22.4 | % | 21.6 | % | ||||||||||||
Professional service margin | 41.4 | % | 40.5 | % | ||||||||||||
Managed service margin | 30.7 | % | 28.6 | % | ||||||||||||
Net sales by customer end market: | ||||||||||||||||
Telecom, media & entertainment | $ | 141,335 | $ | 128,277 | $ | 13,058 | 10.2 | % | ||||||||
SLED | 109,405 | 64,602 | 44,803 | 69.4 | % | |||||||||||
Healthcare | 86,656 | 68,512 | 18,144 | 26.5 | % | |||||||||||
Technology | 73,403 | 69,862 | 3,541 | 5.1 | % | |||||||||||
Financial services | 65,690 | 33,299 | 32,391 | 97.3 | % | |||||||||||
All others | 89,196 | 84,233 | 4,963 | 5.9 | % | |||||||||||
Total | $ | 565,685 | $ | 448,785 | $ | 116,900 | 26.0 | % | ||||||||
Net sales by type: | ||||||||||||||||
Networking | $ | 245,188 | $ | 142,641 | $ | 102,547 | 71.9 | % | ||||||||
Cloud | 172,044 | 164,733 | 7,311 | 4.4 | % | |||||||||||
Security | 45,796 | 47,995 | (2,199 | ) | (4.6 | %) | ||||||||||
Collaboration | 12,956 | 12,980 | (24 | ) | (0.2 | %) | ||||||||||
Other | 22,182 | 17,327 | 4,855 | 28.0 | % | |||||||||||
Total Products | 498,166 | 385,676 | 112,490 | 29.2 | % | |||||||||||
Professional services | 35,556 | 37,168 | (1,612 | ) | (4.3 | %) | ||||||||||
Managed services | 31,963 | 25,941 | 6,022 | 23.2 | % | |||||||||||
Total | $ | 565,685 | $ | 448,785 | $ | 116,900 | 26.0 | % |
Twelve Months Ended September 30, | ||||||||||||
Net sales by customer end market: | 2022 | 2021 | Change | |||||||||
Telecom, Media & Entertainment | 29 | % | 28 | % | 1 | % | ||||||
Technology | 16 | % | 14 | % | 2 | % | ||||||
Healthcare | 14 | % | 15 | % | (1 | %) | ||||||
SLED | 13 | % | 15 | % | (2 | %) | ||||||
Financial Services | 9 | % | 11 | % | (2 | %) | ||||||
All others | 19 | % | 17 | % | 2 | % | ||||||
Total | 100 | % | 100 | % |
Twelve Months Ended September 30, | ||||||||||||
Net sales by vendor: | 2022 | 2021 | Change | |||||||||
Cisco Systems | 37 | % | 36 | % | 1 | % | ||||||
Dell EMC | 9 | % | 8 | % | 1 | % | ||||||
Juniper Networks | 6 | % | 6 | % | 0 | % | ||||||
NetApp | 5 | % | 5 | % | 0 | % | ||||||
HPE | 3 | % | 2 | % | 1 | % | ||||||
Arista Networks | 2 | % | 3 | % | (1 | %) | ||||||
All others | 38 | % | 40 | % | (2 | %) | ||||||
Total | 100 | % | 100 | % |
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended June 30, | ||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | Change | Percent Change | |||||||||||||||||||||||||
Financial Metrics | ||||||||||||||||||||||||||||||||
Portfolio earnings | $ | 3,073 | $ | 2,673 | $ | 400 | 15.0 | % | ||||||||||||||||||||||||
Transactional gains | 1,279 | 1,835 | (556 | ) | (30.3 | %) | ||||||||||||||||||||||||||
Post-contract earnings | 3,634 | 4,726 | (1,092 | ) | (23.1 | %) | ||||||||||||||||||||||||||
Other | 504 | 340 | 164 | 48.2 | % | |||||||||||||||||||||||||||
Net sales | $ | 22,228 | $ | 21,716 | $ | 31,802 | $ | 38,007 | $ | 8,490 | $ | 9,574 | $ | (1,084 | ) | (11.3 | %) | |||||||||||||||
Cost of sales | 5,199 | 3,792 | 6,901 | 10,004 | ||||||||||||||||||||||||||||
Gross profit | 17,029 | 17,924 | 24,901 | 28,003 | 6,361 | 7,872 | (1,511 | ) | (19.2 | %) | ||||||||||||||||||||||
Selling, general, and administrative | 4,543 | 3,701 | 8,198 | 6,323 | ||||||||||||||||||||||||||||
Selling, general, and adminstrative | 3,198 | 3,655 | (457 | ) | (12.5 | %) | ||||||||||||||||||||||||||
Depreciation and amortization | 28 | 28 | 56 | 56 | 28 | 28 | - | 0.0 | % | |||||||||||||||||||||||
Interest and financing costs | 254 | 143 | 479 | 343 | 301 | 225 | 76 | 33.8 | % | |||||||||||||||||||||||
Operating expenses | 4,825 | 3,872 | 8,733 | 6,722 | 3,527 | 3,908 | (381 | ) | (9.7 | %) | ||||||||||||||||||||||
Operating income | $ | 12,204 | $ | 14,052 | $ | 16,168 | $ | 21,281 | $ | 2,834 | $ | 3,964 | $ | (1,130 | ) | (28.5 | %) | |||||||||||||||
Key Metrics & Other Information | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 12,292 | $ | 14,136 | $ | 16,342 | $ | 21,450 | $ | 2,930 | $ | 4,050 | $ | (1,120 | ) | (27.7 | %) |
Six Months Ended September 30, | Three Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Net cash used in operating activities | $ | (119,671 | ) | $ | (135,004 | ) | $ | (20,900 | ) | $ | (102,943 | ) | ||||
Net cash used in investing activities | (12,294 | ) | (13,690 | ) | (63,097 | ) | (1,692 | ) | ||||||||
Net cash provided by financing activities | 71,342 | 75,782 | ||||||||||||||
Net cash provided by (used in) financing activities | 82,605 | 31,111 | ||||||||||||||
Effect of exchange rate changes on cash | 4,776 | 300 | (127 | ) | 1,634 | |||||||||||
Net decrease in cash and cash equivalents | $ | (55,847 | ) | $ | (72,612 | ) | ||||||||||
Net deccrease in cash and cash equivalents | $ | (1,519 | ) | $ | (71,890 | ) |
Six Months Ended September 30, | ||||||||
2022 | 2021 | |||||||
Technology segment | $ | (120,746 | ) | $ | (127,361 | ) | ||
Financing segment | 1,075 | (7,643 | ) | |||||
Net cash provided by (used in) operating activities | $ | (119,671 | ) | $ | (135,004 | ) |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Technology business | $ | (48,259 | ) | $ | (104,645 | ) | ||
Financing segment | 27,359 | 1,702 | ||||||
Net cash used in operating activities | $ | (20,900 | ) | $ | (102,943 | ) |
As of Sepember 30, | ||||||||
2022 | 2021 | |||||||
(DSO) Days sales outstanding (1) | 65 | 64 | ||||||
(DIO) Days inventory outstanding (2) | 36 | 18 | ||||||
(DPO) Days payable outstanding (3) | (47 | ) | (47 | ) | ||||
Cash conversion cycle | 54 | 35 |
As of June 30, | ||||||||
2023 | 2022 | |||||||
(DSO) Days sales outstanding (1) | 62 | 59 | ||||||
(DIO) Days inventory outstanding (2) | 32 | 30 | ||||||
(DPO) Days payable outstanding (3) | (46 | ) | (45 | ) | ||||
Cash conversion cycle | 48 | 44 |
(1) | Represents the rolling |
(2) | Represents the rolling |
(3) | Represents the rolling |
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 | |||||||||||||
April 1, 2022 through April 30, 2022 | 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 | ) | ||||||||||
May 28, 2022 through May 31, 2022 | - | $ | - | - | 1,000,000 | (4 | ) | ||||||||||
June 1, 2022 through June 30, 2022 | 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 | ) |
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 of shares that may yet be purchased under the plans or programs (2) | ||||||||||||
April 1, 2023 through April 30, 2023 | 40,180 | $ | 48.14 | 40,180 | 957,320 | |||||||||||
May 1, 2023 through May 31, 2023 | 47,685 | $ | 44.43 | 47,685 | 909,635 | |||||||||||
June 1, 2023 through June 30, 2023 | 59,621 | $ | 55.64 | 5,676 | 994,324 | |||||||||||
Total | 147,486 | 93,541 |
(1) | All shares were acquired |
(2) | The |
month. As of May 27, |
On March |
Item 5. | OTHER INFORMATION |
Item 6. | EXHIBITS |
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 | ||
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) | ||
Form of Restricted Stock Award Agreement (for awards granted to U.S. employees under and subject to the provisions of the ePlus inc. | ||
Form of Stock Agreement (for awards granted to non-employee directors under and subject to the provisions of the ePlus inc. 2017 Non-Employee Director Long-Term Incentive Plan) | ||
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). | |
Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a). | ||
Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350. | ||
101.INS | 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) |