PLUS 10-K Fiscal year ended March 31, 2017

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended March 31, 2017

OR

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

For the transition period from ___to___.

Commission file number: 1- 34167

e Plus inc.

(Exact name of registrant as specified in its charter)

13595 Dulles Technology Drive, Herndon, VA 20171-3413

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

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

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

None

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

Yes ☐ No ☒

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

Yes ☐ No ☒

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

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

☒

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

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

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

Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of e Plus, computed by reference to the closing price at which the stock was sold as of September 30, 2016 was $619,681,088. The outstanding number of shares of common stock of e Plus as of May 22, 2017, was 14, 158,132 .

DOCUMENTS INCORPORATED BY REFERENCE

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

Portions of the Company's definitive Proxy Statement relating to its 2017 annual meeting of stockholders ( the “2017 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2017 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the Company's fiscal year end to which this report relates.

Table of Contents

		Page
Cautionary Language About Forward-Looking Statements		1
Part I
Item 1.	Business	3
	Executive Officers	13
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	23
Item 2.	Properties	23
Item 3.	Legal Proceedings	23
Item 4.	Mine Safety Disclosures	23
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 8.	Financial Statements and Supplementary Data	49
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	50
Item 9.A	Controls and Procedures	50
Item 9B.	Other Information	51
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	52
Item 11.	Executive Compensation	52
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	52
Item 13.	Certain Relationships and Related Transactions, and Director Independence	52
Item 14.	Principal Accounting Fees and Services	52
Part IV
Item 15.	Exhibits, Financial Statement Schedule	53
Item 16.	Form 10-K Summary	56
Signatures		57

[This Page Intentionally Left Blank]

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

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

·

national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, and downward pressure on prices;

·

significant adverse changes in, reductions in, or loss of our largest volume customer or one or more of our large volume customers, or vendors;

·

exposure to changes in, interpretations of, or enforcement trends in legislation and regulatory matters;

·

the creditworthiness of our customers and our ability to reserve adequately for credit losses;

·

reduction of vendor incentives provided to us;

·

we offer a comprehensive set of solutions — integrating information technology (IT) product sales, third-party software assurance and maintenance, our advanced professional and managed services, our proprietary software, and financing, and encounter the following challenges, risks, difficulties and uncertainties:

·

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

·

increasing the total number of customers utilizing integrated solutions by up-selling within our customer base and gaining new customers;

·

adapting to meet changes in markets and competitive developments;

·

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

·

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

·

performing professional and managed services competently;

·

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

·

reliance on third parties to perform some of our service obligations;

·

changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service and software as a service;

·

our dependency on continued innovations in hardware, software, and services offerings by our vendors and our ability to partner with them;

·

future growth rates in our core businesses;

·

failure to comply with public sector contracts or applicable laws;

·

changes to or loss of members of our senior management team and/or failure to successfully implement succession plans;

·

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

·

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

·

a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us;

·

our contracts may not be adequate to protect us, and we are subject to audit in which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim;

·

disruptions or a security breach in our IT systems and data and audio communication networks;

·

our ability to secure our customers’ electronic and other confidential information, and remain secure during a cyber-security attack;

·

our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, or obtain debt for our financing transactions or the effect of those changes on our common stock or its holders;

·

our ability to realize our investment in leased equipment;

·

our ability to successfully perform due diligence and integrate acquired businesses;

·

the possibility of goodwill impairment charges in the future;

·

our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third party patents, and the costs associated with those actions, and, when appropriate, license required technology; and

·

significant changes in accounting standards including changes to the financial reporting of leases which could impact the demand for our leasing services, or misclassification of products and services we sell resulting in the misapplication of revenue recognition policies or inaccurate costs and completion dates for our services which could affect our estimates.

We cannot be certain that our business strategy will be successful or that we will successfully address these and other challenges, risks and uncertainties. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as other reports that we file with the Securities and Exchange Commission (“SEC”).

Industry and Market Data

This Form 10-K includes industry data that we obtained from periodic industry publications, which represent data, research opinion or viewpoints published as part of syndicated subscription services.

The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Form10-K) and the opinions expressed in the Gartner Report(s) are subject to change without notice

PART I

ITEM 1.

BUSINESS

GENERAL

Our company was founded in 1990 and is a Delaware corporation. e Plus inc. is sometimes referred to in this Annual Report on Form 10-K as “we,” “our,” “us,” “ourselves,” or “ e Plus.”

Our operations are conducted through two business segments. Our technology segment sells information technology hardware products, third-party software and maintenance contracts, our own and third-party advanced professional and managed services, and our proprietary software. Our financing segment operations primarily consist of the financing of information technology equipment, software and related services. Both segments sell to commercial entities, state and local governments, government contractors, and educational institutions. See Note 15, “Segment Reporting” in the consolidated financial statements included elsewhere in this report.

e Plus inc. does not engage in any business other than serving as the parent holding company for the following operating companies:

Technology

·

e Plus Technology, inc.;

·

e Plus Software LLC;

·

e Plus Technology Services, inc.

·

e Plus Cloud Services, inc., and

·

IGXGlobal UK, Limited

Financing

·

e Plus Group, inc.;

·

e Plus Government, inc.;

·

e Plus Canada Company;

·

e Plus Capital, inc.;

·

e Plus Iceland, inc., and

·

IGX Capital UK, Ltd.

We began using the name e Plus inc. in 1999 after changing our name from MLC Holdings, Inc. e Plus Technology, inc. conducts our technology sales and services business. e Plus Software, LLC was formed on March 8, 2016, and provides consulting services, proprietary software for enterprise supply management, and provides proprietary software for document management. e Plus Capital, inc. owns 100 percent of e Plus Canada Company, which was created on December 27, 2001 to transact business within Canada. e Plus Government, inc. was incorporated on September 17, 1997 to transact business with governmental contractors servicing the federal government marketplace and other state and local governments. e Plus Technology Services, inc. was incorporated on May 17, 2010 to provide professional and management services and IGXGlobal UK, Limited was acquired in December 2015.

OUR BUSINESS

We are a leading solutions provider that delivers actionable outcomes for organizations by utilizing information technology (IT) and consulting solutions to drive business agility and innovation. Leveraging world-class engineering talent, we assess, plan, deliver, and secure solutions comprised of leading technologies and consumption models aligned with client’s needs. Our expertise and experience enables e Plus to craft optimized solutions that take advantage of the cost, scale and efficiency of private, public and hybrid cloud in an evolving market. We also provide consulting, professional, managed and complete lifecycle management services including flexible financing solutions. We have been in the business of selling, leasing, financing, and managing information technology and other assets for more than 27 years.

Our primary focus is to deliver integrated technology solutions that address our client’s Cloud, Security and Digital Infrastructure needs, both on-premise and in the cloud. Our Hybrid IT framework is a lifecycle approach that includes consulting, assessment, architecture, testing, implementation, managed services, maintenance and periodic consultative reviews. In addition to cloud, our portfolio of expertise includes software defined, security, IoT, data and analytics, mobility, hyper-converged infrastructure, and other advanced technologies. We design, implement and manage an array of IT solutions from multiple leading IT vendors. We are an authorized reseller from over 1,000 vendors, but primarily from approximately 100 vendors, including Artista Networks, Check Point, Cisco Systems, Citrix, Commvault, Dell EMC, F5 Networks, Gigamon, HP Inc., HPE, Juniper Networks, Lenovo, NetApp, Nimble Storage, Oracle, Palo Alto Networks, Pure Storage, Quantum, Splunk, and VMware, among many others. We possess top-level engineering certifications with a broad range of leading IT vendors that enable us to offer multi-vendor IT solutions that are optimized for each of our customers’ specific requirements. Our hosted, proprietary software solutions are focused on giving our customers more control over their IT supply chain, by automating and optimizing the procurement and management of their owned, leased, and consumption-based assets.

Our scale and financial resources have enabled us to continue investing in engineering and technology resources and stay current with emerging technology trends. By delivering leading edge Hybrid IT solutions, e Plus has become a trusted advisor to our clients. Our integrated technology solutions incorporate hardware, software, security and both managed and professional services. In addition, we offer a wide range of consumption options including leasing and financing for technology and other capital assets. We believe our lifecycle approach offering of integrated solutions, services, financing, and our proprietary supply chain software, is unique in the industry. This broad portfolio enables us to deliver a unique client experience that spans the continuum from fast delivery of competitively priced products, services, subsequent management and upkeep, through to end-of-life disposal services. This approach also permits us to accommodate our client’s business requirements and deliver ever-more-sophisticated hybrid IT solutions, thus solidifying our relationships and value.

Our go-to-market strategy focuses primarily on diverse end-markets for middle market to large enterprises. For the year ended March 31, 2017, the percentage of revenue by customer end market within our technology segment includes state and local government, and educational institutions 21%, technology industry 23%, telecommunications, media and entertainment 15%, financial services 13%, and healthcare 11%. Sales to Apple Inc. represented approximately 13% of our net sales for the year ended March 31, 2017. No customer accounted for more than 10% of net sales for the years ended March 31, 2016 and 2015. The majority of our sales were generated within the United States; however, we have the ability to support our customers nationally and internationally including a physical location in the United Kingdom (“U.K.”), which was established by acquisition in December, 2015. Our technology segment accounts for 97% of our net sales, and 80% of our operating income, while our financing segment accounts for 3% of our net sales, and 20% of our operating income for the year ended March 31, 2017.

OUR INDUSTRY BACKGROUND AND MARKET OPPORTUNITY

We participate in the large and growing United States IT market which, according to Gartner, Inc. is estimated to generate sales of over $1.12 trillion in 2017, and is expected to grow by 3.1% in calendar year 2017 and at an annual rate of approximately 3.1% for 2016 through 2021 ¹ .

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

·

Hybrid IT Strategy. Over the past several years, cloud architectures and cloud-enabled frameworks, whether public, private, or hybrid, have become the core foundation of modern IT. Our strategy is to assist our clients in assessing, defining and deploying private and hybrid clouds that align with their business needs. This strategy leverages our strength in deploying private clouds, while also incorporating elements of the public cloud. By assessing their applications, workloads, business requirements, etc., we deploy solutions that leverage the best of all technology platforms and consumption models. For example, we may build a private cloud solution to host mission critical applications, while creating a public cloud solution for development, collaboration, or disaster recovery. As the market continues to mature, we will continue to build and acquire skills that align with agile development (DevOps), application refactoring and analytics. Our cloud strategy is tightly aligned with all of our key strategic initiatives, including security, digital infrastructure, and IT.

·

Increasing sophistication and incidences of IT security breaches and cyber-attacks. Over the last decade, cyber-attacks have become more sophisticated, more numerous and pervasive, and increasingly difficult to safeguard against. Most experts believe that it isn’t a matter of if a cyber attack will affect an organization; it’s a matter of when and how often. We believe our customers are focused on all aspects of cyber security, including intellectual property, data and business processes, as well as compliance with an increasing number of general and industry-specific government regulations. In order to meet current and future security threats, enterprises must implement solutions that are fully-integrated and capable of monitoring, detecting, containing and remediating security threats and attacks.

·

Disruptive technologies are creating complexity and challenges for customers and vendors. The rapid evolution of disruptive technologies, and the speed by which they impact organizations’ IT infrastructures, has made it difficult for customers to effectively design, procure, implement and manage their own IT systems. Moreover, increased budget pressures, fewer internal resources, a fragmented vendor landscape and fast time-to-value expectations make it challenging for customers to design, implement and manage secure, efficient and cost-effective IT environments. Customers are increasingly turning to IT solutions providers such as e Plus to implement these complex IT offerings such as software defined infrastructure, cloud computing, converged and hyper-converged infrastructures, big data analytics, and flash storage

·

Customer IT decision making is shifting from IT departments to line-of- business personnel. As IT consumption shifts from legacy, on-premise infrastructure to agile ‘on-demand’ and ‘as-a-service’ solutions, customer procurement decisions are being shifted from traditional IT personnel to lines-of-business personnel, which is changing the customer engagement model and types of consultative services required to fulfill customer needs. In addition, many of the services create recurring revenue streams paid over time, rather than upfront revenue.

·

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

·

Reduction in the number of IT solutions providers . We believe that customers are seeking to reduce the number of solutions providers they do business with to improve supply chain and internal efficiencies, enhance accountability, improve supplier management practices and reduce costs. As a result, customers are required to select IT solutions providers that are capable of delivering complex multi-vendor IT solutions.

·

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

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¹ Gartner, “Market Databook, 1Q17 Update,” 2016-2021 End-User Spending on IT Products and Services, January, 2017 (U.S.).

COMPETITION

The market for IT solutions is highly competitive, subject to macro-economic cycles and the entry of new competitors, and is significantly affected by disruptive technologies and other market activities of industry participants. We expect to continue to compete in all areas of our business against local, regional, national and international firms, including: vendors, international, national and regional resellers and service providers. Many of our competitors are direct marketers with a little value add, and sell products as commodities which can place downward pressure on product pricing. In addition, many IT vendors may sell or lease directly to our customers, and our continued ability to compete effectively may be affected by the policies of such vendors. We face indirect competition from potential customers’ internal development efforts and have to overcome potential customers’ reluctance to move away from legacy systems, processes, and solution providers. As IT consumption shifts from IT personnel and legacy infrastructure to line-of-business based outcomes utilizing off-premise, on-demand, and cloud solutions, the legacy resale model is shifting from upfront sales to recurring revenue model.

The leasing market is also competitive and subject to changing economic conditions and market activities of leading industry participants. We expect to continue to compete against local, regional, national and international firms, including banks, specialty finance companies, vendors' captive finance companies, and third-party leasing companies. Banks and other large financial services companies sell directly to business customers, particularly larger enterprise customers, and may provide other financial or ancillary services that we do not provide. Vendor captive leasing companies may utilize internal transfer pricing to effectively lower lease rates and/or bundle equipment sales and leasing to provide highly competitive packages to customers. Third-party leasing companies may have deep customer relationships with contracts in place that are difficult to displace. However, these competitors typically do not provide the breadth of product, service, and software offerings that we provide to our customers.

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

OUR SOLUTIONS

Technology Segment

·

IT Sales: Our offerings consist of hardware, software, maintenance, software assurance and services. We believe that our customers view technology purchases as integrated solutions, rather than discrete product and service categories, and the majority of our sales are derived from integrated solutions involving our customers’ data center, network, and collaboration infrastructure. We hold various technical and sales related certifications that authorize us to market their products and enable us to provide advanced professional services. We actively engage with emerging vendors to offer their technologies to our customers. Our flexible platform and customizable catalogs facilitate the addition of new vendors’ products with minimal incremental effort.

·

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

·

ePlus managed services offer a flexible subscription model to monitor, manage, and maximize business critical technologies—including cloud, security, data center, mobility, and collaboration;

·

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

·

Security solutions help safeguard our customers’ IT infrastructure through environment analysis, risk identification and the implementation of security solutions and processes;

·

Staff augmentation services provide customers with flexible headcount options while allowing them to access talent, fill specific technology skill gaps, or provide short-term or long-term IT professional help, which also includes services, such as Virtual Chief Information Officer (vCIO) and Virtual Chief Information Security Officer (vCISO), used to help complement existing personnel and build three to five year IT roadmaps;

·

Server and desktop support provides outsourcing services to respond to our customers’ business demands while minimizing overhead;

·

Project management services enhance productivity and collaboration to enable successful implementations.

·

Proprietary Software: Our line of proprietary software products is called OneSource® and consists of the following products:

·

OneSource®IT is an online web based software portal for customers purchasing IT equipment, software, and services from us;

·

OneSource® Procurement is a complete web-based software tool to facilitate procurement of any type of asset;

·

OneSource® Asset Management is a software platform for managing and tracking corporate assets including vendor maintenance contracts; and

·

OneSource® DigitalPaper is a document management software application.

Financing Segment

·

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

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

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

·

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

·

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

·

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

OUR COMPETITIVE STRENGTHS

Large Addressable Market with Substantial Growth Opportunities Driven by Increasing IT Complexity

We participate in the large and growing IT market with specific focus on the data center, network, cloud, security, virtualization and mobility segments of the industry, facilitated by our professional and managed service solutions. We believe we are well positioned in the complex high-growth IT solutions segment and can achieve outsized growth relative to the overall IT market.

		March 31,
		2017				2016				Change
Sales and Marketing			493				457				36
Professional Services			400				342				58
Administration			200				195				5
Software Development and Internal IT			73				73				-
Executive Management			7				7				-
			1,173				1,074				99

Name	Age	Position
Phillip G. Norton	73	Executive Chairman
Mark P. Marron	55	Chief Executive Officer and President
Elaine D. Marion	49	Chief Financial Officer

Quarter Ended		High				Low
Fiscal Year 2017
March 31, 2017		$	70.50			$	54.28
December 31, 2016		$	59.67			$	44.20
September 30, 2016		$	47.73			$	39.09
June 30, 2016		$	46.54			$	36.18
Fiscal Year 2016
March 31, 2016		$	48.10			$	30.89
December 31, 2015		$	54.67			$	38.86
September 30, 2015		$	40.90			$	35.70
June 30, 2015		$	44.64			$	37.09

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, 2016 through April 30, 2016			226,070			$	40.35				226,070				541,326	(2)
May 1, 2016 through May 31, 2016			157,318			$	40.80				157,318				384,008	(3)
June 1, 2016 through June 30, 2016			129,668			$	42.39				70,196				313,812	(4)
July 1, 2016 through July 31, 2016			167,020			$	41.24				167,020				146,792	(5)
August 1, 2016 through August 16, 2016			36,358			$	41.44				36,358				110,434	(6)
August 19, 2016 through August 31, 2016			-			$	-				-				1,000,000	(7)
September 1, 2016 through September 30, 2016			-			$	-				-				1,000,000	(8)
October 1, 2016 through October 31, 2016			-			$	-				-				1,000,000	(9)
November 1, 2016 through November 30, 2016			-			$	-				-				1,000,000	(10)
December 1, 2016 through December 31, 2016			-			$	-				-				1,000,000	(11)
January 1, 2017 through January 31, 2017			-			$	-				-				1,000,000	(12)
February 1, 2017 through February 28, 2017			-			$	-				-				1,000,000	(13)
March 1, 2017 through March 31, 2017			-			$	-				-				1,000,000	(14)

		For the years ended March 31,
Statement of Operations Data:		2017				2016				2015				2014				2013
		(in thousands, except per share data)
Net sales		$	1,329,389			$	1,204,199			$	1,143,282			$	1,057,536			$	983,112
Cost of sales			1,029,630				942,142				898,735				840,623				778,339
Gross profit			299,759				262,057				244,547				216,913				204,773
Operating expense			214,027				186,306				173,837				156,815				146,028
Operating income			85,732				75,751				70,710				60,098				58,745
Other income			380				-				7,603				-				-
Earnings before provision for income taxes			86,112				75,751				78,313				60,098				58,745
Provision for income taxes			35,556				31,004				32,473				24,825				23,915
Net earnings		$	50,556			$	44,747			$	45,840			$	35,273			$	34,830
Net earnings per common share - basic		$	3.65			$	3.08			$	3.13			$	2.21			$	2.19
Net earnings per common share - diluted		$	3.60			$	3.05			$	3.10			$	2.19			$	2.16
Dividends per common share		$	-			$	-			$	-			$	-			$	1.25

		For the years ended March 31,
Balance Sheet Data:			2017				2016				2015				2014				2013
		(in thousands)
Cash and cash equivalents		$	109,760			$	94,766			$	76,175			$	80,179			$	52,720
Accounts receivable—net			291,016				276,399				249,803				243,216				192,254
Total financing receivables and operating leases—net			123,539				132,354				143,900				143,739				122,603
Total assets		$	741,720			$	616,680			$	568,275			$	550,103			$	437,872
Total non-recourse and recourse notes payable		$	37,424			$	47,422			$	56,564			$	68,888			$	41,739
Total liabilities		$	395,802			$	297,802			$	289,013			$	283,720			$	199,640
Total stockholders' equity		$	345,918			$	318,878			$	279,262			$	266,383			$	238,232
Weighted average common shares outstanding—basic			13,867				14,513				14,636				15,853				15,620
Weighted average common shares outstanding—diluted			14,028				14,688				14,786				15,999				15,806

		For the years ended March 31,
		2017				2016				2015				2014				2013
Sales of products and services		$	1,290,228			$	1,163,337			$	1,100,884			$	1,013,374			$	936,228
Adjusted gross billings of product and services (1)		$	1,775,708			$	1,556,463			$	1,435,039			$	1,276,133			$	1,163,577
Gross margin			22.5	%			21.8	%			21.4	%			20.5	%			20.8	%
Gross margin, product and services			20.5	%			19.9	%			19.4	%			18.3	%			18.0	%
Operating income margin			6.4	%			6.3	%			6.2	%			5.7	%			6.0	%
Net earnings		$	50,556			$	44,747			$	45,840			$	35,273			$	34,830
Net earnings margin			3.8	%			3.7	%			4.0	%			3.3	%			3.5	%
Net earnings per common share - diluted		$	3.60			$	3.05			$	3.10			$	2.19			$	2.16
Non-GAAP: Net earnings (2)		$	52,447			$	46,480			$	42,529			$	35,925			$	35,423
Non-GAAP: Net earnings per common share - diluted (2)		$	3.74			$	3.16			$	2.87			$	2.23			$	2.20
Adjusted EBITDA (3)		$	92,984			$	81,299			$	75,043			$	62,890			$	61,134
Adjusted EBITDA margin (3)			7.0	%			6.8	%			6.6	%			5.9	%			6.2	%
Purchases of property and equipment used internally		$	3,356			$	2,442			$	3,610			$	4,238			$	1,436
Purchases of equipment under operating leases			6,202				12,026				8,163				5,714				14,148
Total capital expenditures		$	9,558			$	14,468			$	11,773			$	9,952			$	15,584

		For the years ended March 31,
		2017				2016				2015				2014				2013
Sales of products and services		$	1,290,228			$	1,163,337			$	1,100,884			$	1,013,374			$	936,228
Costs incurred related to sales of third party software assurance, maintenance and services			485,480			$	393,126			$	334,155			$	262,759			$	227,349
Adjusted gross billings of product and services		$	1,775,708			$	1,556,463			$	1,435,039			$	1,276,133			$	1,163,577

			For the years ended March 31,
			2017				2016				2015				2014				2013
	GAAP: Earnings before tax		$	86,112			$	75,751			$	78,313			$	60,098			$	58,745
	Acquisition related amortization expense			4,000				2,917				1,888				1,110				1,000
	Other income			(380	)			-				(7,603	)			-				-
	Non-GAAP: Earnings before provision for income taxes			89,732				78,668				72,598				61,208				59,745
	GAAP: Provision for income taxes			35,556				31,004				32,473				24,825				23,915
	Acquisition related amortization expense			1,372				1,184				781				458				407
	Other income			(157	)			-				(3,185	)			-				-
	Tax benefit on restricted stock			514				-				-				-				-
	Non-GAAP: Provision for income taxes			37,285				32,188				30,069				25,283				24,322
	Non-GAAP: Net earnings		$	52,447			$	46,480			$	42,529			$	35,925			$	35,423
	GAAP: Net earnings per common share - diluted		$	3.60			$	3.05			$	3.10			$	2.19			$	2.16
	Non-GAAP: Net earnings per common share - diluted		$	3.74			$	3.16			$	2.87			$	2.23			$	2.20

			For the years ended March 31,
	Consolidated		2017				2016				2015				2014				2013
	Net earnings		$	50,556			$	44,747			$	45,840			$	35,273			$	34,830
	Provision for income taxes			35,556				31,004				32,473				24,825				23,915
	Depreciation and amortization			7,252				5,548				4,333				2,792				2,389
	Other income			(380	)			-				(7,603	)			-				-
	Adjusted EBITDA		$	92,984			$	81,299			$	75,043			$	62,890			$	61,134
	Technology Segment
	Operating income		$	68,912			$	63,689			$	60,958			$	51,311			$	46,528
	Depreciation and amortization			7,243				5,532				4,310				2,769				2,369
	Adjusted EBITDA		$	76,155			$	69,221			$	65,268			$	54,080			$	48,897
	Financing Segment
	Operating income		$	16,820			$	12,062			$	9,752			$	8,787			$	12,217
	Depreciation and amortization			9				16				23				23				20
	Adjusted EBITDA		$	16,829			$	12,078			$	9,775			$	8,810			$	12,237

		Year Ended March 31,
		2017				2016				Change
Sales of product and services		$	1,290,228			$	1,163,337			$	126,891				10.9	%
Fee and other income			4,709				5,728				(1,019	)			(17.8	%)
Net sales			1,294,937				1,169,065				125,872				10.8	%
Cost of sales, product and services			1,025,188				931,782				93,406				10.0	%
Gross profit			269,749				237,283				32,466				13.7	%
Selling, general, and administrative expenses			193,594				167,992				25,602				15.2	%
Depreciation and amortization			7,243				5,532				1,711				30.9	%
Interest and financing costs			-				70				(70	)			(100.0	%)
Operating expenses			200,837				173,594				27,243				15.7	%
Operating income		$	68,912			$	63,689			$	5,223				8.2	%
Adjusted EBITDA		$	76,155			$	69,221			$	6,934				10.0	%

Quarter Ended		Sequential				Year over Year
March 31, 2017			1.3	%			10.3	%
December 31, 2016			(12.1	%)			10.3	%
September 30, 2016			24.5	%			11.4	%
June 30, 2016			(0.5	%)			11.7	%
March 31, 2016			1.3	%			13.3	%

		Year Ended March 31,
		2017				2016				Change
Revenue by customer end market:
Technology			23	%			23	%			-
SLED			21	%			22	%			(1	%)
Telecom, Media & Entertainment			15	%			14	%			1	%
Financial Services			13	%			12	%			1	%
Healthcare			11	%			10	%			1	%
Other			17	%			19	%			(2	%)
Total			100	%			100	%
Revenue by vendor:
Cisco Systems			47	%			49	%			(2	%)
HP Inc. & HPE			6	%			7	%			(1	%)
NetApp			5	%			5	%			-
Sub-total			58	%			61	%			(3	%)
Other			42	%			39	%			3	%
Total			100	%			100	%

		Year Ended March 31,
		2017				2016				Change
Financing revenue		$	34,200			$	35,091			$	(891	)			(2.5	%)
Fee and other income			252				43				209				486.0	%
Net sales			34,452				35,134				(682	)			(1.9	%)
Direct lease costs			4,442				10,360				(5,918	)			(57.1	%)
Gross profit			30,010				24,774				5,236				21.1	%
Selling, general, and administrative expenses			11,638				10,988				650				5.9	%
Depreciation and amortization			9				16				(7	)			(43.8	%)
Interest and financing costs			1,543				1,708				(165	)			(9.7	%)
Operating expenses			13,190				12,712				478				3.8	%
Operating income		$	16,820			$	12,062			$	4,758				39.4	%
Adjusted EBITDA		$	16,829			$	12,078			$	4,751				39.3	%

		Year Ended March 31,
		2016				2015				Change
Sales of product and services		$	1,163,337			$	1,100,884			$	62,453				5.7	%
Fee and other income			5,728				7,565				(1,837	)			(24.3	%)
Net sales			1,169,065				1,108,449				60,616				5.5	%
Cost of sales, product and services			931,782				887,673				44,109				5.0	%
Gross profit			237,283				220,776				16,507				7.5	%
Selling, general, and administrative expenses			167,992				155,412				12,580				8.1	%
Depreciation and amortization			5,532				4,310				1,222				28.4	%
Interest and financing costs			70				96				(26	)			(27.1	%)
Operating expenses			173,594				159,818				13,776				8.6	%
Operating income		$	63,689			$	60,958			$	2,731				4.5	%
Adjusted EBITDA		$	69,221			$	65,268			$	3,953				6.1	%

Quarter Ended		Sequential				Year over Year
March 31, 2016			1.3	%			13.3	%
December 31, 2015			(11.2	%)			(2.6	%)
September 30, 2015			24.9	%			13.1	%
June 30, 2015			0.9	%			(0.6	%)
March 31, 2015			(13.0	%)			3.2	%

		Year Ended March 31,
		2016				2015				Change
Revenue by customer end market:
SLED			22	%			22	%			-
Technology			23	%			19	%			4	%
Telecom, Media & Entertainment			14	%			18	%			(4	%)
Healthcare			10	%			10	%			-
Financial Services			12	%			10	%			2	%
Other			19	%			21	%			(2	%)
Total			100	%			100	%
Revenue by vendor:
Cisco Systems			49	%			49	%			-
HP Inc. & HPE			7	%			8	%			(1	%)
NetApp			5	%			7	%			(2	%)
Sub-total			61	%			64	%			(3	%)
Other			39	%			36	%			3	%
Total			100	%			100	%

		Year Ended March 31,
		2016				2015				Change
Financing revenue		$	35,091			$	34,728			$	363				1.0	%
Fee and other income			43				105				(62	)			(59.0	%)
Net sales			35,134				34,833				301				0.9	%
Direct lease costs			10,360				11,062				(702	)			(6.3	%)
Gross profit			24,774				23,771				1,003				4.2	%
Selling, general, and administrative expenses			10,988				11,713				(725	)			(6.2	%)
Depreciation and amortization			16				23				(7	)			(30.4	%)
Interest and financing costs			1,708				2,283				(575	)			(25.2	%)
Operating expenses			12,712				14,019				(1,307	)			(9.3	%)
Operating income		$	12,062			$	9,752			$	2,310				23.7	%
Adjusted EBITDA		$	12,078			$	9,775			$	2,303				23.6	%

		Year Ended March 31,
		2017				2016				2015
Net cash provided by operating activities		$	33,016			$	14,110			$	14,411
Net cash used in investing activities			(26,345	)			(50,179	)			(30,592	)
Net cash provided by financing activities			7,814				54,448				12,256
Effect of exchange rate changes on cash			509				212				(79	)
Net increase (decrease) in cash and cash equivalents		$	14,994			$	18,591			$	(4,004	)

		As of March 31,
		2017				2016				2015
(DSO) Days sales outstanding (1)			59				56				60
(DIO) Days inventory outstanding (2)			24				7				8
(DPO) Days payable outstanding (3)			(45	)			(45	)			(45	)
Cash conversion cycle			38				18				23

Maximum Credit Limit at March 31, 2017				Balance as of March 31, 2017				Maximum Credit Limit at March 31, 2016				Balance as of March 31, 2016
$	250,000			$	132,612			$	250,000			$	121,893

						Payments Due by Period
		Total				1 year				Years 2 & 3				Years 4 & 5				More than 5 years
Recourse & non-recourse notes payable (1)		$	37,424			$	26,993			$	9,719			$	712			$	-
Interest payments on recourse and non-recourse notes payable			972				637				319				16				-
Operating lease obligations			9,049				4,715				3,615				719				-
Total		$	47,445			$	32,345			$	13,653			$	1,447			$	-