☒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.) |
Large accelerated filer ☐ | Accelerated filer ☒ | |
Non-accelerated filer | Smaller reporting company ☐ Emerging growth company ☐ |
Part I. Financial Information: | ||
Item 1. | ||
5 | ||
6 | ||
7 | ||
8 | ||
10 | ||
11 | ||
Item 2. | 26 | |
Item 3. | ||
Item 4. | ||
Part II. Other Information: | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
· | 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: |
o | managing a diverse product set of solutions in highly competitive markets with a number of key vendors; |
o | increasing the total number of customers utilizing integrated solutions by up-selling within our customer base and gaining new customers; |
o | adapting to meet changes in markets and competitive developments; |
o | maintaining and increasing advanced professional services by retaining highly skilled, competent, personnel and vendor certifications; |
o | 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; |
o | performing professional and managed services competently; |
o | maintaining our proprietary software and updating our technology infrastructure to remain competitive in the marketplace; and |
o | reliance on third parties to perform some of our service |
· | 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 |
As of December 31, 2016 | As of March 31, 2016 | As of September 30, 2017 | As of March 31, 2017 | |||||||||||||
ASSETS | (in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 69,677 | $ | 94,766 | $ | 60,185 | $ | 109,760 | ||||||||
Accounts receivable—trade, net | 297,460 | 234,628 | 293,098 | 266,029 | ||||||||||||
Accounts receivable—other, net | 34,183 | 41,771 | 29,900 | 24,987 | ||||||||||||
Inventories—net | 111,076 | 33,343 | ||||||||||||||
Inventories | 51,431 | 93,557 | ||||||||||||||
Financing receivables—net, current | 65,945 | 56,448 | 69,932 | 51,656 | ||||||||||||
Deferred costs | 6,418 | 6,371 | 18,868 | 7,971 | ||||||||||||
Other current assets | 4,035 | 10,649 | 31,931 | 43,364 | ||||||||||||
Total current assets | 588,794 | 477,976 | 555,345 | 597,324 | ||||||||||||
Financing receivables and operating leases—net | 74,490 | 75,906 | 61,847 | 71,883 | ||||||||||||
Property, equipment and other assets | 11,704 | 8,644 | 16,278 | 11,956 | ||||||||||||
Goodwill and other intangible assets—net | 61,690 | 54,154 | ||||||||||||||
Goodwill | 76,470 | 48,397 | ||||||||||||||
Other intangible assets—net | 29,056 | 12,160 | ||||||||||||||
TOTAL ASSETS | $ | 736,678 | $ | 616,680 | $ | 738,996 | $ | 741,720 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
LIABILITIES | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 121,562 | $ | 76,780 | $ | 99,965 | $ | 113,518 | ||||||||
Accounts payable—floor plan | 120,854 | 121,893 | 120,217 | 132,612 | ||||||||||||
Salaries and commissions payable | 17,412 | 14,981 | 17,484 | 18,878 | ||||||||||||
Deferred revenue | 63,665 | 18,344 | 45,562 | 65,312 | ||||||||||||
Recourse notes payable—current | 1,605 | 2,288 | 688 | 908 | ||||||||||||
Non-recourse notes payable—current | 41,785 | 26,042 | 31,767 | 26,085 | ||||||||||||
Other current liabilities | 15,842 | 13,118 | 20,438 | 19,179 | ||||||||||||
Total current liabilities | 382,725 | 273,446 | 336,121 | 376,492 | ||||||||||||
Recourse notes payable—long term | - | 1,054 | ||||||||||||||
Non-recourse notes payable—long term | 10,608 | 18,038 | 4,666 | 10,431 | ||||||||||||
Deferred tax liability—net | 3,075 | 3,001 | 1,791 | 1,799 | ||||||||||||
Other liabilities | 6,475 | 2,263 | 20,356 | 7,080 | ||||||||||||
TOTAL LIABILITIES | 402,883 | 297,802 | 362,934 | 395,802 | ||||||||||||
COMMITMENTS AND CONTINGENCIES (Note 8) | ||||||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||
Preferred stock, $.01 per share par value; 2,000 shares authorized; none issued or outstanding | - | - | ||||||||||||||
Common stock, $.01 per share par value; 25,000 shares authorized;13,310 issued and 7,080 outstanding at December 31, 2016 and 13,237 issued and 7,365 outstanding at March 31, 2016 | 133 | 132 | ||||||||||||||
Preferred stock, $.01 per share par value; 2,000 shares authorized; none outstanding | - | - | ||||||||||||||
Common stock, $.01 per share par value; 25,000 shares authorized; 14,171 outstanding at September 30, 2017 and 14,161 outstanding at March 31, 2017 | 142 | 142 | ||||||||||||||
Additional paid-in capital | 122,031 | 117,511 | 126,716 | 123,536 | ||||||||||||
Treasury stock, at cost, 6,230 and 5,872 shares at December 31, 2016 and March 31, 2016, respectively | (158,948 | ) | (129,518 | ) | ||||||||||||
Treasury stock, at cost | (4,383 | ) | - | |||||||||||||
Retained earnings | 371,290 | 331,224 | 253,467 | 222,823 | ||||||||||||
Accumulated other comprehensive income—foreign currency translation adjustment | (711 | ) | (471 | ) | 120 | (583 | ) | |||||||||
Total Stockholders' Equity | 333,795 | 318,878 | 376,062 | 345,918 | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 736,678 | $ | 616,680 | $ | 738,996 | $ | 741,720 |
Three Months Ended December 31, | Nine Months Ended December 31, December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
(in thousands, except per share data) | (in thousands, except per share data) | |||||||||||||||||||||||||||||||
Net sales | $ | 326,657 | $ | 298,644 | $ | 996,622 | $ | 904,796 | $ | 370,845 | $ | 371,462 | $ | 738,002 | $ | 669,965 | ||||||||||||||||
Cost of sales | 252,871 | 234,584 | 773,239 | 709,685 | 283,274 | 289,529 | 572,838 | 520,368 | ||||||||||||||||||||||||
Gross profit | 73,786 | 64,060 | 223,383 | 195,111 | 87,571 | 81,933 | 165,164 | 149,597 | ||||||||||||||||||||||||
Professional and other fees | 1,397 | 1,882 | 4,918 | 4,913 | ||||||||||||||||||||||||||||
Salaries and benefits | 42,385 | 37,372 | 124,479 | 108,326 | ||||||||||||||||||||||||||||
General and administrative expenses | 6,378 | 5,434 | 20,424 | 17,390 | ||||||||||||||||||||||||||||
Selling, general, and administrative expenses | 56,340 | 51,607 | 111,004 | 99,661 | ||||||||||||||||||||||||||||
Depreciation and amortization | 1,910 | 1,331 | 5,408 | 3,739 | 2,129 | 1,723 | 4,192 | 3,498 | ||||||||||||||||||||||||
Interest and financing costs | 409 | 396 | 1,158 | 1,371 | 274 | 400 | 633 | 749 | ||||||||||||||||||||||||
Operating expenses | 52,479 | 46,415 | 156,387 | 135,739 | 58,743 | 53,730 | 115,829 | 103,908 | ||||||||||||||||||||||||
Operating income | 21,307 | 17,645 | 66,996 | 59,372 | 28,828 | 28,203 | 49,335 | 45,689 | ||||||||||||||||||||||||
Other income | - | - | 380 | - | ||||||||||||||||||||||||||||
Other income and (expense) | (141 | ) | 380 | 130 | 380 | |||||||||||||||||||||||||||
Earnings before tax | 21,307 | 17,645 | 67,376 | 59,372 | 28,687 | 28,583 | 49,465 | 46,069 | ||||||||||||||||||||||||
Provision for income taxes | 8,687 | 7,348 | 27,310 | �� | 24,582 | 11,466 | 11,808 | 18,821 | 18,623 | |||||||||||||||||||||||
Net earnings | $ | 12,620 | $ | 10,297 | $ | 40,066 | $ | 34,790 | $ | 17,221 | $ | 16,775 | $ | 30,644 | $ | 27,446 | ||||||||||||||||
Net earnings per common share—basic | $ | 1.83 | $ | 1.41 | $ | 5.77 | $ | 4.79 | $ | 1.24 | $ | 1.21 | $ | 2.21 | $ | 1.97 | ||||||||||||||||
Net earnings per common share—diluted | $ | 1.81 | $ | 1.40 | $ | 5.71 | $ | 4.74 | $ | 1.23 | $ | 1.21 | $ | 2.19 | $ | 1.95 | ||||||||||||||||
Weighted average common shares outstanding—basic | 6,896 | 7,280 | 6,946 | 7,260 | 13,879 | 13,818 | 13,843 | 13,941 | ||||||||||||||||||||||||
Weighted average common shares outstanding—diluted | 6,960 | 7,329 | 7,013 | 7,336 | 14,008 | 13,884 | 14,021 | 14,055 |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
(amounts in thousands) | (amounts in thousands) | |||||||||||||||||||||||||||||||
NET EARNINGS | $ | 12,620 | $ | 10,297 | $ | 40,066 | $ | 34,790 | $ | 17,221 | $ | 16,775 | $ | 30,644 | $ | 27,446 | ||||||||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | (145 | ) | (139 | ) | (240 | ) | (273 | ) | 391 | 122 | 703 | (95 | ) | |||||||||||||||||||
Other comprehensive income (loss) | (145 | ) | (139 | ) | (240 | ) | (273 | ) | 391 | 122 | 703 | (95 | ) | |||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||
TOTAL COMPREHENSIVE INCOME | $ | 12,475 | $ | 10,158 | $ | 39,826 | $ | 34,517 | $ | 17,612 | $ | 16,897 | $ | 31,347 | $ | 27,351 |
Nine Months Ended December 31, | Six Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cash Flows From Operating Activities: | ||||||||||||||||
Net earnings | $ | 40,066 | $ | 34,790 | $ | 30,644 | $ | 27,446 | ||||||||
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 8,758 | 13,020 | 6,745 | 5,832 | ||||||||||||
Reserve for credit losses, inventory obsolescence and sales returns | 926 | (91 | ) | 232 | 849 | |||||||||||
Share-based compensation expense | 4,520 | 4,210 | 3,180 | 2,903 | ||||||||||||
Deferred taxes | 89 | - | ||||||||||||||
Payments from lessees directly to lenders—operating leases | (1,831 | ) | (3,587 | ) | (1,190 | ) | (1,521 | ) | ||||||||
Gain on disposal of property, equipment and operating lease equipment | (3,742 | ) | (2,621 | ) | (5,364 | ) | (1,853 | ) | ||||||||
Gain on sale of financing receivables | (3,968 | ) | (5,439 | ) | (3,498 | ) | (3,110 | ) | ||||||||
Other | 227 | 224 | - | 427 | ||||||||||||
Changes in: | ||||||||||||||||
Accounts receivable—trade | (57,732 | ) | (31,692 | ) | (15,405 | ) | (58,276 | ) | ||||||||
Accounts receivable—other | (4,232 | ) | (1,176 | ) | (6,289 | ) | (3,517 | ) | ||||||||
Inventories | (77,422 | ) | (5,643 | ) | 43,041 | (47,323 | ) | |||||||||
Financing receivables—net | 17,797 | (10,670 | ) | 2,730 | 4,255 | |||||||||||
Deferred costs, other intangible assets and other assets | 1,838 | 5,888 | (13,000 | ) | 2,867 | |||||||||||
Accounts payable | 53,208 | (5,912 | ) | (6,920 | ) | 14,804 | ||||||||||
Salaries and commissions payable, deferred revenue and other liabilities | 51,200 | (9,018 | ) | (21,576 | ) | 12,411 | ||||||||||
Net provided by (cash used) in operating activities | $ | 29,702 | $ | (17,717 | ) | |||||||||||
Net cash provided by (used in) operating activities | $ | 13,330 | $ | (43,806 | ) | |||||||||||
Cash Flows From Investing Activities: | ||||||||||||||||
Proceeds from sale of property, equipment and operating lease equipment | 6,380 | 5,349 | 7,976 | 3,588 | ||||||||||||
Purchases of property, equipment and operating lease equipment | (7,300 | ) | (17,008 | ) | ||||||||||||
Purchases of property, equipment, software, and operating lease equipment | (3,436 | ) | (3,169 | ) | ||||||||||||
Purchases of assets to be leased or financed | (5,897 | ) | (10,828 | ) | (3,792 | ) | (4,506 | ) | ||||||||
Issuance of financing receivables | (114,671 | ) | (102,612 | ) | (100,785 | ) | (63,961 | ) | ||||||||
Repayments of financing receivables | 44,091 | 49,230 | 41,087 | 24,726 | ||||||||||||
Proceeds from sale of financing receivables | 39,857 | 48,174 | 43,777 | 24,674 | ||||||||||||
Cash used in acquisitions, net of cash acquired | (9,500 | ) | (16,649 | ) | (37,718 | ) | - | |||||||||
Net cash used in investing activities | $ | (47,040 | ) | $ | (44,344 | ) | $ | (52,891 | ) | $ | (18,648 | ) |
Nine Months Ended December 31, | Six Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cash Flows From Financing Activities: | ||||||||||||||||
Borrowings of non-recourse and recourse notes payable | 34,020 | $ | 27,865 | $ | 32,566 | $ | 22,940 | |||||||||
Repayments of non-recourse and recourse notes payable | (5,412 | ) | (254 | ) | (24,730 | ) | (5,320 | ) | ||||||||
Repurchase of common stock | (30,493 | ) | (2,475 | ) | (4,383 | ) | (30,492 | ) | ||||||||
Dividends paid | - | (80 | ) | |||||||||||||
Payments of contingent consideration | (718 | ) | (1,158 | ) | ||||||||||||
Repayments of financing of acquisitions | (1,104 | ) | - | |||||||||||||
Net borrowings (repayments) on floor plan facility | (5,602 | ) | 28,581 | (12,395 | ) | 28,202 | ||||||||||
Net cash provided by (used in) financing activities | (8,205 | ) | 52,479 | (10,046 | ) | 15,330 | ||||||||||
Effect of exchange rate changes on cash | 454 | (26 | ) | 32 | 393 | |||||||||||
Net Decrease in Cash and Cash Equivalents | (25,089 | ) | (9,608 | ) | (49,575 | ) | (46,731 | ) | ||||||||
Cash and Cash Equivalents, Beginning of Period | 94,766 | 76,175 | 109,760 | 94,766 | ||||||||||||
Cash and Cash Equivalents, End of Period | $ | 69,677 | $ | 66,567 | $ | 60,185 | $ | 48,035 | ||||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||||||||||
Cash paid for interest | $ | 38 | $ | 65 | $ | 254 | $ | 31 | ||||||||
Cash paid for income taxes | $ | 23,381 | $ | 26,463 | $ | 20,041 | $ | 10,282 | ||||||||
Schedule of Non-Cash Investing and Financing Activities: | ||||||||||||||||
Investing Activities | ||||||||||||||||
Proceeds from sale of property, equipment, and operating lease equipment | $ | 429 | $ | 7,993 | $ | 906 | $ | 567 | ||||||||
Purchase of property, equipment, and operating lease equipment | $ | (2,442 | ) | $ | (11,985 | ) | ||||||||||
Purchases of property, equipment, software, and operating lease equipment | $ | 724 | $ | (2,332 | ) | |||||||||||
Purchase of assets to be leased or financed | $ | (12,700 | ) | $ | (8,554 | ) | $ | (4,134 | ) | $ | (6,944 | ) | ||||
Issuance of financing receivables | $ | (110,120 | ) | $ | (91,022 | ) | $ | (66,764 | ) | $ | (86,128 | ) | ||||
Repayment of financing receivables | $ | 16,454 | $ | 12,357 | $ | 7,096 | $ | 12,439 | ||||||||
Proceeds from sale of financing receivables | $ | 104,430 | $ | 75,584 | $ | 70,423 | $ | 75,739 | ||||||||
Financing Activities | ||||||||||||||||
Financing of acquisitions | $ | (12,050 | ) | $ | - | |||||||||||
Borrowing of non-recourse and recourse notes payable | $ | 33,651 | $ | 42,840 | $ | 8,904 | $ | 23,010 | ||||||||
Repayments of non-recourse and recourse notes payable | $ | (20,438 | ) | $ | (22,292 | ) | $ | (10,704 | ) | $ | (15,305 | ) | ||||
Vesting of share-based compensation | $ | 7,982 | $ | 7,743 | $ | 11,969 | $ | 7,940 |
Common Stock | Additional Paid-In | Treasury | Retained | Accumulated Other Comprehensive | Common Stock | Additional Paid-In | Treasury | Retained | Accumulated Other Comprehensive | Total | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Capital | Stock | Earnings | Income | Total | Shares | Par Value | Capital | Stock | Earnings | Income | ||||||||||||||||||||||||||||||||||||||||||||
Balance, April 1, 2016 | 7,365 | $ | 132 | $ | 117,511 | $ | (129,518 | ) | $ | 331,224 | $ | (471 | ) | $ | 318,878 | |||||||||||||||||||||||||||||||||||||||||
Balance, April 1, 2017 | 14,161 | $ | 142 | $ | 123,536 | $ | - | $ | 222,823 | $ | (583 | ) | $ | 345,918 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock awards | 73 | 1 | - | - | - | - | 1 | 68 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | - | - | 4,520 | - | - | - | 4,520 | - | - | 3,180 | - | - | - | 3,180 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (358 | ) | - | - | (29,430 | ) | - | - | (29,430 | ) | (58 | ) | - | - | (4,383 | ) | - | - | (4,383 | ) | ||||||||||||||||||||||||||||||||||||
Net earnings | - | - | - | - | 40,066 | - | 40,066 | - | - | - | - | 30,644 | - | 30,644 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (240 | ) | (240 | ) | - | - | - | - | - | 703 | 703 | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2016 | 7,080 | $ | 133 | $ | 122,031 | $ | (158,948 | ) | $ | 371,290 | $ | (711 | ) | $ | 333,795 | |||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2017 | 14,171 | $ | 142 | $ | 126,716 | $ | (4,383 | ) | $ | 253,467 | $ | 120 | $ | 376,062 |
1. | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | RECENT ACCOUNTING PRONOUNCEMENTS |
· | We will adopt the guidance in our quarter ending June 30, 2018. We currently prefer to adopt the standard using the full retrospective method; however, our ability to do so is dependent on many factors, including the completion of our analysis of information necessary to recast prior period financial statements. Based on these and other factors, we may decide to use the modified retrospective method. |
· | Substantially all of our revenue within our technology segment is contractual and is within the scope of ASU No. 2014-09, as amended. The majority of our revenues within our financing segment are scoped out of this update. |
· | The majority of our revenues within our technology segment are derived from sales of third-party products, third-party software, third-party services, such as maintenance and software assurance, and sales of ePlus professional and managed services. |
o | We recognize revenue on sales of third party product and third-party software on a gross basis upon delivery and we are still assessing whether we are acting as a principal or an agent in these transactions under the update. |
o | We recognize sales of third party maintenance and software assurance on a net basis at the date of sale and sales of ePlus professional and managed services on a gross basis as the services are performed. We do not anticipate a material impact to our revenue recognition for these transactions under the update. |
· | We expect that our disclosures in our notes to our consolidated financial statements related to revenue recognition will be significantly expanded under the new standard. |
3. | FINANCING RECEIVABLES AND OPERATING LEASES |
December 31, 2016 | Notes Receivables | Lease-Related Receivables | Total Financing Receivables | |||||||||||||||||||||
September 30, 2017 | Notes Receivables | Lease-Related Receivables | Total Financing Receivables | |||||||||||||||||||||
Minimum payments | $ | 53,167 | $ | 71,343 | $ | 124,510 | $ | 46,479 | $ | 67,693 | $ | 114,172 | ||||||||||||
Estimated unguaranteed residual value (1) | - | 18,069 | 18,069 | - | 15,313 | 15,313 | ||||||||||||||||||
Initial direct costs, net of amortization (2) | 465 | 518 | 983 | 304 | 341 | 645 | ||||||||||||||||||
Unearned income | - | (7,017 | ) | (7,017 | ) | - | (5,199 | ) | (5,199 | ) | ||||||||||||||
Reserve for credit losses (3) | (3,508 | ) | (778 | ) | (4,286 | ) | (441 | ) | (648 | ) | (1,089 | ) | ||||||||||||
Total, net | $ | 50,124 | $ | 82,135 | $ | 132,259 | $ | 46,342 | $ | 77,500 | $ | 123,842 | ||||||||||||
Reported as: | ||||||||||||||||||||||||
Current | $ | 32,269 | $ | 33,676 | $ | 65,945 | $ | 27,238 | $ | 42,694 | $ | 69,932 | ||||||||||||
Long-term | 17,855 | 48,459 | 66,314 | 19,104 | 34,806 | 53,910 | ||||||||||||||||||
Total, net | $ | 50,124 | $ | 82,135 | $ | 132,259 | $ | 46,342 | $ | 77,500 | $ | 123,842 |
(1) | Includes estimated unguaranteed residual values of |
(2) | Initial direct costs are shown net of amortization of |
(3) | For details on reserve for credit losses, refer to Note 5, “Reserves for Credit Losses.” |
March 31, 2016 | Notes Receivables | Lease-Related Receivables | Total Financing Receivables | |||||||||||||||||||||
March 31, 2017 | Notes Receivables | Lease-Related Receivables | Total Financing Receivables | |||||||||||||||||||||
Minimum payments | $ | 44,442 | $ | 66,303 | $ | 110,745 | $ | 48,524 | $ | 57,872 | $ | 106,396 | ||||||||||||
Estimated unguaranteed residual value (1) | - | 12,693 | 12,693 | - | 18,273 | 18,273 | ||||||||||||||||||
Initial direct costs, net of amortization (2) | 312 | 475 | 787 | 279 | 341 | 620 | ||||||||||||||||||
Unearned income | - | (5,543 | ) | (5,543 | ) | - | (5,913 | ) | (5,913 | ) | ||||||||||||||
Reserve for credit losses (3) | (3,381 | ) | (685 | ) | (4,066 | ) | (3,434 | ) | (679 | ) | (4,113 | ) | ||||||||||||
Total, net | $ | 41,373 | $ | 73,243 | $ | 114,616 | $ | 45,369 | $ | 69,894 | $ | 115,263 | ||||||||||||
Reported as: | ||||||||||||||||||||||||
Current | $ | 24,962 | $ | 31,486 | $ | 56,448 | $ | 23,780 | $ | 27,876 | $ | 51,656 | ||||||||||||
Long-term | 16,411 | 41,757 | 58,168 | 21,589 | 42,018 | 63,607 | ||||||||||||||||||
Total, net | $ | 41,373 | $ | 73,243 | $ | 114,616 | $ | 45,369 | $ | 69,894 | $ | 115,263 |
(1) | Includes estimated unguaranteed residual values of |
(2) | Initial direct costs are shown net of amortization of |
(3) | For details on reserve for credit losses, refer to Note 5, “Reserves for Credit Losses.” |
December 31, 2016 | March 31, 2016 | September 30, 2017 | March 31, 2017 | |||||||||||||
Cost of equipment under operating leases | $ | 17,062 | $ | 36,635 | $ | 16,886 | $ | 16,725 | ||||||||
Accumulated depreciation | (8,886 | ) | (18,897 | ) | (8,949 | ) | (8,449 | ) | ||||||||
Investment in operating lease equipment—net (1) | $ | 8,176 | $ | 17,738 | $ | 7,937 | $ | 8,276 |
(1) | These totals include estimated unguaranteed residual values of |
4. | GOODWILL AND OTHER INTANGIBLE ASSETS |
December 31, 2016 | March 31, 2016 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization / Impairment Loss | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization / Impairment Loss | Net Carrying Amount | |||||||||||||||||||
Goodwill | $ | 58,145 | $ | (8,673 | ) | $ | 49,472 | $ | 50,824 | $ | (8,673 | ) | $ | 42,151 | ||||||||||
Customer relationships & other intangibles | 22,818 | (11,640 | ) | 11,178 | 20,401 | (9,193 | ) | 11,208 | ||||||||||||||||
Capitalized software development | 3,247 | (2,207 | ) | 1,040 | 2,709 | (1,914 | ) | 795 | ||||||||||||||||
Total | $ | 84,210 | $ | (22,520 | ) | $ | 61,690 | $ | 73,934 | $ | (19,780 | ) | $ | 54,154 |
Six Months Ended September 30, 2017 | Six Months Ended September 30, 2016 | |||||||||||||||||||||||
Goodwill | Accumulated Amortization / Impairment Loss | Net Carrying Amount | Goodwill | Accumulated Amortization / Impairment Loss | Net Carrying Amount | |||||||||||||||||||
Balance as of March 31 | $ | 57,070 | $ | (8,673 | ) | $ | 48,397 | $ | 50,824 | $ | (8,673 | ) | $ | 42,151 | ||||||||||
Acquisitions | 27,939 | - | 27,939 | - | - | - | ||||||||||||||||||
Foreign currency translations | 134 | - | 134 | (140 | ) | - | (140 | ) | ||||||||||||||||
Balance as of September 30 | $ | 85,143 | $ | (8,673 | ) | $ | 76,470 | $ | 50,684 | $ | (8,673 | ) | $ | 42,011 |
September 30, 2017 | March 31, 2017 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Customer relationships & other intangibles | $ | 41,663 | $ | (14,914 | ) | $ | 26,749 | $ | 23,373 | $ | (12,553 | ) | $ | 10,820 | ||||||||||
Capitalized software development | 4,807 | (2,500 | ) | 2,307 | 3,649 | (2,310 | ) | 1,339 | ||||||||||||||||
Total | $ | 46,470 | $ | (17,414 | ) | $ | 29,056 | $ | 27,022 | $ | (14,863 | ) | $ | 12,159 |
Accounts Receivable | Notes Receivable | Lease-Related Receivables | Total | Accounts Receivable | Notes Receivable | Lease-Related Receivables | Total | |||||||||||||||||||||||||
Balance April 1, 2016 | $ | 1,127 | $ | 3,381 | $ | 685 | $ | 5,193 | ||||||||||||||||||||||||
Balance April 1, 2017 | $ | 1,279 | $ | 3,434 | $ | 679 | $ | 5,392 | ||||||||||||||||||||||||
Provision for credit losses | 229 | 139 | 93 | 461 | (5 | ) | 27 | 133 | 155 | |||||||||||||||||||||||
Write-offs and other | (32 | ) | (12 | ) | - | (44 | ) | - | (3,020 | ) | (164 | ) | (3,184 | ) | ||||||||||||||||||
Balance December 31, 2016 | $ | 1,324 | $ | 3,508 | $ | 778 | $ | 5,610 | ||||||||||||||||||||||||
Accounts Receivable | Notes Receivable | Lease-Related Receivables | Total | |||||||||||||||||||||||||||||
Balance April 1, 2015 | $ | 1,169 | $ | 3,573 | $ | 881 | $ | 5,623 | ||||||||||||||||||||||||
Provision for credit losses | 12 | 7 | (50 | ) | (31 | ) | ||||||||||||||||||||||||||
Write-offs and other | (119 | ) | - | - | (119 | ) | ||||||||||||||||||||||||||
Balance December 31, 2015 | $ | 1,062 | $ | 3,580 | $ | 831 | $ | 5,473 | ||||||||||||||||||||||||
Balance September 30, 2017 | $ | 1,274 | $ | 441 | $ | 648 | $ | 2,363 |
Accounts Receivable | Notes Receivable | Lease-Related Receivables | Total | |||||||||||||
Balance April 1, 2016 | $ | 1,127 | $ | 3,381 | $ | 685 | $ | 5,193 | ||||||||
Provision for credit losses | 76 | 176 | 273 | 525 | ||||||||||||
Write-offs and other | (31 | ) | - | - | (31 | ) | ||||||||||
Balance September 30, 2016 | $ | 1,172 | $ | 3,557 | $ | 958 | $ | 5,687 |
December 31, 2016 | March 31, 2016 | September 30, 2017 | March 31, 2017 | |||||||||||||||||||||||||||||
Notes Receivable | Lease- Related Receivables | Notes Receivable | Lease- Related Receivables | Notes Receivable | Lease- Related Receivables | Notes Receivable | Lease- Related Receivables | |||||||||||||||||||||||||
Reserves for credit losses: | ||||||||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 406 | $ | 655 | $ | 279 | $ | 562 | $ | 376 | $ | 648 | $ | 348 | $ | 556 | ||||||||||||||||
Ending balance: individually evaluated for impairment | 3,102 | 123 | 3,102 | 123 | 65 | - | 3,086 | 123 | ||||||||||||||||||||||||
Ending balance | $ | 3,508 | $ | 778 | $ | 3,381 | $ | 685 | $ | 441 | $ | 648 | $ | 3,434 | $ | 679 | ||||||||||||||||
Minimum payments: | ||||||||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 50,016 | $ | 71,201 | $ | 41,340 | $ | 66,161 | $ | 46,414 | $ | 67,693 | $ | 45,438 | $ | 57,730 | ||||||||||||||||
Ending balance: individually evaluated for impairment | 3,151 | 142 | 3,102 | 142 | 65 | - | 3,086 | 142 | ||||||||||||||||||||||||
Ending balance | $ | 53,167 | $ | 71,343 | $ | 44,442 | $ | 66,303 | $ | 46,479 | $ | 67,693 | $ | 48,524 | $ | 57,872 |
31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Current | Unbilled Minimum Lease Payments | Total Minimum Lease Payments | Unearned Income | Non- Recourse Notes Payable | Net Credit Exposure | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Current | Unbilled Minimum Lease Payments | Total Minimum Lease Payments | Unearned Income | Non- Recourse Notes Payable | Net Credit Exposure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2017 | September 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 163 | $ | 49 | $ | 98 | $ | 310 | $ | 137 | $ | 45,570 | $ | 46,017 | $ | (3,466 | ) | $ | (21,532 | ) | $ | 21,019 | $ | 42 | $ | 24 | $ | 510 | $ | 576 | $ | 656 | $ | 46,126 | $ | 47,358 | $ | (2,405 | ) | $ | (17,893 | ) | $ | 27,060 | ||||||||||||||||||||||||||||||||||||
Average CQR | 44 | 25 | 96 | 165 | 43 | 24,976 | 25,184 | (1,667 | ) | (12,684 | ) | 10,833 | 62 | 30 | 135 | 227 | 147 | 19,961 | 20,335 | (1,061 | ) | (8,652 | ) | 10,622 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | - | - | 142 | 142 | - | - | 142 | (19 | ) | - | 123 | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 207 | $ | 74 | $ | 336 | $ | 617 | $ | 180 | $ | 70,546 | $ | 71,343 | $ | (5,152 | ) | $ | (34,216 | ) | $ | 31,975 | $ | 104 | $ | 54 | $ | 645 | $ | 803 | $ | 803 | $ | 66,087 | $ | 67,693 | $ | (3,466 | ) | $ | (26,545 | ) | $ | 37,682 | ||||||||||||||||||||||||||||||||||||
March 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2017 | March 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | �� | $ | 575 | $ | 52 | $ | 94 | $ | 721 | $ | 984 | $ | 46,157 | $ | 47,862 | $ | (2,705 | ) | $ | (22,914 | ) | $ | 22,243 | $ | 379 | $ | 224 | $ | 230 | $ | 833 | $ | 406 | $ | 32,532 | $ | 33,771 | $ | (2,362 | ) | $ | (12,924 | ) | $ | 18,485 | |||||||||||||||||||||||||||||||||||
Average CQR | 15 | 17 | 78 | 110 | 159 | 18,030 | 18,299 | (1,387 | ) | (8,714 | ) | 8,198 | 113 | 20 | 113 | 246 | 91 | 23,622 | 23,959 | (1,556 | ) | (13,353 | ) | 9,050 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | - | - | 142 | 142 | - | - | 142 | (19 | ) | - | 123 | - | - | 142 | 142 | - | - | 142 | (19 | ) | - | 123 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 590 | $ | 69 | $ | 314 | $ | 973 | $ | 1,143 | $ | 64,187 | $ | 66,303 | $ | (4,111 | ) | $ | (31,628 | ) | $ | 30,564 | $ | 492 | $ | 244 | $ | 485 | $ | 1,221 | $ | 497 | $ | 56,154 | $ | 57,872 | $ | (3,937 | ) | $ | (26,277 | ) | $ | 27,658 |
31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Current | Unbilled Notes Receivable | Total Notes Receivable | Non- Recourse Notes Payable | Net Credit Exposure | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Current | Unbilled Notes Receivable | Total Notes Receivable | Non- Recourse Notes Payable | Net Credit Exposure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2017 | September 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 1,369 | $ | 312 | $ | 827 | $ | 2,508 | $ | 1,244 | $ | 28,206 | $ | 31,958 | $ | (15,330 | ) | $ | 16,628 | $ | 122 | $ | 141 | $ | 2 | $ | 265 | $ | 1,635 | $ | 32,984 | $ | 34,884 | $ | (22,938 | ) | $ | 11,946 | ||||||||||||||||||||||||||||||||||
Average CQR | 157 | 10 | - | 167 | 920 | 16,971 | 18,058 | (12,640 | ) | 5,418 | 737 | 4 | 9 | 750 | 1,442 | 9,338 | 11,530 | (5,388 | ) | 6,142 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | - | - | 3,151 | 3,151 | - | - | 3,151 | - | 3,151 | - | - | 65 | 65 | - | - | 65 | - | 65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,526 | $ | 322 | $ | 3,978 | $ | 5,826 | $ | 2,164 | $ | 45,177 | $ | 53,167 | $ | (27,970 | ) | $ | 25,197 | $ | 859 | $ | 145 | $ | 76 | $ | 1,080 | $ | 3,077 | $ | 42,322 | $ | 46,479 | $ | (28,326 | ) | $ | 18,153 | ||||||||||||||||||||||||||||||||||
March 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2017 | March 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
High CQR | $ | 399 | $ | 305 | $ | 2,168 | $ | 2,872 | $ | 301 | $ | 24,092 | $ | 27,265 | $ | (11,644 | ) | $ | 15,621 | $ | 183 | $ | 663 | $ | 755 | $ | 1,601 | $ | 1,165 | $ | 23,359 | $ | 26,125 | $ | (12,003 | ) | $ | 14,122 | ||||||||||||||||||||||||||||||||||
Average CQR | - | - | - | - | 202 | 13,873 | 14,075 | (9,942 | ) | 4,133 | 28 | 5 | - | 33 | 555 | 18,725 | 19,313 | (13,732 | ) | 5,581 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Low CQR | - | - | 3,102 | 3,102 | - | - | 3,102 | - | 3,102 | - | - | 3,086 | 3,086 | - | - | 3,086 | - | 3,086 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 399 | $ | 305 | $ | 5,270 | $ | 5,974 | $ | 503 | $ | 37,965 | $ | 44,442 | $ | (21,586 | ) | $ | 22,856 | $ | 211 | $ | 668 | $ | 3,841 | $ | 4,720 | $ | 1,720 | $ | 42,084 | $ | 48,524 | $ | (25,735 | ) | $ | 22,789 | ||||||||||||||||||||||||||||||||||
6. | PROPERTY, EQUIPMENT, OTHER ASSETS AND LIABILITIES |
December 31, 2016 | March 31, 2016 | September 30, 2017 | March 31, 2017 | |||||||||||||
Other current assets: | ||||||||||||||||
Deposits & funds held in escrow | $ | 485 | $ | 3,116 | $ | 26,843 | $ | 39,161 | ||||||||
Prepaid assets | 2,773 | 6,683 | 4,136 | 3,388 | ||||||||||||
Other | 777 | 850 | 952 | 815 | ||||||||||||
Total other current assets | $ | 4,035 | $ | 10,649 | $ | 31,931 | $ | 43,364 | ||||||||
Other assets: | ||||||||||||||||
Property, equipment and other assets | ||||||||||||||||
Property and equipment, net | $ | 8,363 | $ | 6,690 | ||||||||||||
Deferred costs | $ | 2,979 | $ | 1,831 | 5,908 | 3,536 | ||||||||||
Property and equipment, net | 6,945 | 6,266 | ||||||||||||||
Other | 1,780 | 547 | 2,007 | 1,730 | ||||||||||||
Total other assets - long term | $ | 11,704 | $ | 8,644 | $ | 16,278 | $ | 11,956 | ||||||||
December 31, 2016 | March 31, 2016 | |||||||||||||||
Other current liabilities: | ||||||||||||||||
Accrued expenses | $ | 6,969 | $ | 7,109 | ||||||||||||
Accrued income taxes payable | 1,093 | - | ||||||||||||||
Other | 7,780 | 6,009 | ||||||||||||||
Total other current liabilities | $ | 15,842 | $ | 13,118 | ||||||||||||
Other liabilities: | ||||||||||||||||
Deferred revenue | $ | 3,599 | $ | 1,866 | ||||||||||||
Other | 2,876 | 397 | ||||||||||||||
Total other liabilities - long term | $ | 6,475 | $ | 2,263 |
September 30, 2017 | March 31, 2017 | |||||||
Other current liabilities: | ||||||||
Accrued expenses | $ | 8,506 | $ | 7,450 | ||||
Accrued income taxes payable | 1,378 | 1,761 | ||||||
Other | 10,554 | 9,968 | ||||||
Total other current liabilities | $ | 20,438 | $ | 19,179 | ||||
Other liabilities: | ||||||||
Deferred revenue | $ | 8,204 | $ | 4,704 | ||||
Contingent consideration long-term | 11,713 | 1,500 | ||||||
Other | 439 | 876 | ||||||
Total other liabilities - long term | $ | 20,356 | $ | 7,080 |
7. | NOTES PAYABLE AND CREDIT FACILITY |
December 31, 2016 | March 31, 2016 | September 30, 2017 | March 31, 2017 | |||||||||||||
Recourse notes payable with interest rates ranging from 3.20% to 4.13% as of March 31, 2017 and ranging from 3.20% to 3.40% September 30, 2017. | ||||||||||||||||
Current | $ | 688 | $ | 908 | ||||||||||||
Recourse notes payable with interest rates ranging from 2.75% and 4.13% at December 31, 2016 and ranging from 2.70% and 4.13%at March 31, 2016. | ||||||||||||||||
Current | $ | 1,605 | $ | 2,288 | ||||||||||||
Long-term | - | 1,054 | ||||||||||||||
Total recourse notes payable | $ | 1,605 | $ | 3,342 | ||||||||||||
Non-recourse notes payable secured by financing receivables and investments in operating leases with interest rates ranging from 2.0% to 7.50% at December 31, 2016 and ranging from 1.70% to 8.50% as of March 31, 2016. | ||||||||||||||||
Non-recourse notes payable secured by financing receivables and investment in operating leases with interest rates ranging from 2.00% to 7.75% as of March 31, 2017 and ranging from 2.00% to 8.45% September 30, 2017. | ||||||||||||||||
Current | $ | 41,785 | $ | 26,042 | $ | 31,767 | $ | 26,085 | ||||||||
Long-term | 10,608 | 18,038 | 4,666 | 10,431 | ||||||||||||
Total non-recourse notes payable | $ | 52,393 | $ | 44,080 | $ | 36,433 | $ | 36,516 |
8. | COMMITMENTS AND CONTINGENCIES |
9. | EARNINGS PER SHARE |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
Net earnings attributable to common shareholders - basic and diluted | $ | 12,620 | $ | 10,297 | $ | 40,066 | $ | 34,790 | $ | 17,221 | $ | 16,775 | $ | 30,644 | $ | 27,446 | ||||||||||||||||
Basic and diluted common shares outstanding: | ||||||||||||||||||||||||||||||||
Weighted average common shares outstanding — basic | 6,896 | 7,280 | 6,946 | 7,260 | 13,879 | 13,818 | 13,843 | 13,941 | ||||||||||||||||||||||||
Effect of dilutive shares | 64 | 49 | 67 | 76 | 129 | 66 | 178 | 114 | ||||||||||||||||||||||||
Weighted average shares common outstanding — diluted | 6,960 | 7,329 | 7,013 | 7,336 | 14,008 | 13,884 | 14,021 | 14,055 | ||||||||||||||||||||||||
Earnings per common share - basic | $ | 1.83 | $ | 1.41 | $ | 5.77 | $ | 4.79 | $ | 1.24 | $ | 1.21 | $ | 2.21 | $ | 1.97 | ||||||||||||||||
Earnings per common share - diluted | $ | 1.81 | $ | 1.40 | $ | 5.71 | $ | 4.74 | $ | 1.23 | $ | 1.21 | $ | 2.19 | $ | 1.95 |
Three Months Ended | Nine Months Ended | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Earnings per common share: | ||||||||||||||||
Basic — pro forma | $ | 0.92 | $ | 0.71 | $ | 2.88 | $ | 2.40 | ||||||||
Diluted — pro forma | $ | 0.91 | $ | 0.70 | $ | 2.86 | $ | 2.37 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic — pro forma | 13,791 | 14,561 | 13,891 | 14,519 | ||||||||||||
Diluted — pro forma | 13,920 | 14,659 | 14,026 | 14,672 |
10. | STOCKHOLDERS’ EQUITY |
11. | SHARE-BASED COMPENSATION |
Number of Shares | Weighted Average Grant- date Fair Value | Number of Shares | Weighted Average Grant-date Fair Value | |||||||||||||
Nonvested April 1, 2016 | 203,828 | $ | 72.33 | |||||||||||||
Nonvested April 1, 2017 | 371,689 | $ | 40.45 | |||||||||||||
Granted | 72,961 | $ | 86.24 | 72,177 | $ | 80.21 | ||||||||||
Vested | (90,356 | ) | $ | 65.99 | (155,811 | ) | $ | 38.51 | ||||||||
Forfeited | (349 | ) | $ | 76.87 | (4,108 | ) | $ | 39.37 | ||||||||
Nonvested December 31, 2016 | 186,084 | $ | 80.86 | |||||||||||||
Nonvested September 30, 2017 | 283,947 | $ | 51.64 |
12. | INCOME TAXES |
13. | 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) | |||||||||||||||||||||||||
December 31.2016 | ||||||||||||||||||||||||||||||||
September 30, 2017 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 29,851 | $ | 29,851 | $ | - | $ | - | $ | 2,560 | $ | 2,560 | $ | - | $ | - | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Contingent consideration | $ | 554 | $ | - | $ | - | $ | 554 | $ | 12,650 | $ | - | $ | - | $ | 12,650 | ||||||||||||||||
March 31, 2016 | ||||||||||||||||||||||||||||||||
March 31, 2017 | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 39,509 | $ | 39,509 | $ | - | $ | - | $ | 50,866 | $ | 50,866 | $ | - | $ | - | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Contingent consideration | $ | 1,041 | $ | - | $ | - | $ | 1,041 | $ | 554 | $ | - | $ | - | $ | 554 |
14. | SEGMENT REPORTING |
Three Months Ended | ||||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||
Sales of product and services | $ | 317,391 | $ | - | $ | 317,391 | $ | 287,859 | $ | - | $ | 287,859 | ||||||||||||
Financing revenue | - | 8,190 | 8,190 | - | 9,289 | 9,289 | ||||||||||||||||||
Fee and other income | 915 | 161 | 1,076 | 1,506 | (10 | ) | 1,496 | |||||||||||||||||
Net sales | 318,306 | 8,351 | 326,657 | 289,365 | 9,279 | 298,644 | ||||||||||||||||||
Cost of sales, product and services | 251,729 | - | 251,729 | 231,503 | - | 231,503 | ||||||||||||||||||
Direct lease costs | - | 1,142 | 1,142 | - | 3,081 | 3,081 | ||||||||||||||||||
Cost of sales | 251,729 | 1,142 | 252,871 | 231,503 | 3,081 | 234,584 | ||||||||||||||||||
Professional and other fees | 1,216 | 181 | 1,397 | 1,608 | 274 | 1,882 | ||||||||||||||||||
Salaries and benefits | 40,155 | 2,230 | 42,385 | 35,043 | 2,329 | 37,372 | ||||||||||||||||||
General and administrative expenses | 6,409 | (31 | ) | 6,378 | 5,203 | 231 | 5,434 | |||||||||||||||||
Depreciation and amortization | 1,908 | 2 | 1,910 | 1,327 | 4 | 1,331 | ||||||||||||||||||
Interest and financing costs | - | 409 | 409 | 10 | 386 | 396 | ||||||||||||||||||
Operating expenses | 49,688 | 2,791 | 52,479 | 43,191 | 3,224 | 46,415 | ||||||||||||||||||
Operating income | $ | 16,889 | $ | 4,418 | $ | 21,307 | $ | 14,671 | $ | 2,974 | $ | 17,645 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 1,941 | $ | 985 | $ | 2,926 | $ | 1,365 | $ | 3,152 | $ | 4,517 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 849 | $ | 3,282 | $ | 4,131 | $ | 506 | $ | 884 | $ | 1,390 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 546,728 | $ | 189,950 | $ | 736,678 | $ | 401,422 | $ | 229,012 | $ | 630,434 |
Nine Months Ended | ||||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
Statement of Operations | Technology | Financing | Total | Technology | Financing | Total | ||||||||||||||||||
Sales of product and services | $ | 968,799 | $ | - | $ | 968,799 | $ | 871,814 | $ | - | $ | 871,814 | ||||||||||||
Financing revenue | - | 23,899 | 23,899 | - | 27,914 | 27,914 | ||||||||||||||||||
Fee and other income | 3,679 | 245 | 3,924 | 5,038 | 30 | 5,068 | ||||||||||||||||||
Net sales | 972,478 | 24,144 | 996,622 | 876,852 | 27,944 | 904,796 | ||||||||||||||||||
Cost of sales, product and services | 769,780 | - | 769,780 | 700,429 | - | 700,429 | ||||||||||||||||||
Direct lease costs | - | 3,459 | 3,459 | - | 9,256 | 9,256 | ||||||||||||||||||
Cost of sales | 769,780 | 3,459 | 773,239 | 700,429 | 9,256 | 709,685 | ||||||||||||||||||
Professional and other fees | 4,138 | 780 | 4,918 | 4,175 | 738 | 4,913 | ||||||||||||||||||
Salaries and benefits | 117,822 | 6,657 | 124,479 | 101,471 | 6,855 | 108,326 | ||||||||||||||||||
General and administrative expenses | 19,335 | 1,089 | 20,424 | 16,653 | 737 | 17,390 | ||||||||||||||||||
Depreciation and amortization | 5,400 | 8 | 5,408 | 3,728 | 11 | 3,739 | ||||||||||||||||||
Interest and financing costs | - | 1,158 | 1,158 | 51 | 1,320 | 1,371 | ||||||||||||||||||
Operating expenses | 146,695 | 9,692 | 156,387 | 126,078 | 9,661 | 135,739 | ||||||||||||||||||
Operating income | $ | 56,003 | $ | 10,993 | $ | 66,996 | $ | 50,345 | $ | 9,027 | $ | 59,372 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 5,494 | $ | 3,264 | $ | 8,758 | $ | 3,831 | $ | 9,189 | $ | 13,020 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 2,413 | $ | 4,887 | $ | 7,300 | $ | 1,700 | $ | 15,308 | $ | 17,008 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 546,728 | $ | 189,950 | $ | 736,678 | $ | 401,422 | $ | 229,012 | $ | 630,434 |
Three Months Ended | ||||||||||||||||||||||||
September 30, 2017 | September 30, 2016 | |||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||
Sales of product and services | $ | 357,759 | $ | - | $ | 357,759 | $ | 361,227 | $ | - | $ | 361,227 | ||||||||||||
Financing revenue | - | 12,035 | 12,035 | - | 8,722 | 8,722 | ||||||||||||||||||
Fee and other income | 1,043 | 8 | 1,051 | 1,488 | 25 | 1,513 | ||||||||||||||||||
Net sales | 358,802 | 12,043 | 370,845 | 362,715 | 8,747 | 371,462 | ||||||||||||||||||
Cost of sales, product and services | 281,953 | - | 281,953 | 288,204 | - | 288,204 | ||||||||||||||||||
Direct lease costs | - | 1,321 | 1,321 | - | 1,325 | 1,325 | ||||||||||||||||||
Cost of sales | 281,953 | 1,321 | 283,274 | 288,204 | 1,325 | 289,529 | ||||||||||||||||||
Selling, general, and administrative expenses | 53,503 | 2,837 | 56,340 | 48,302 | 3,305 | 51,607 | ||||||||||||||||||
Depreciation and amortization | 2,128 | 1 | 2,129 | 1,721 | 2 | 1,723 | ||||||||||||||||||
Interest and financing costs | - | 274 | 274 | - | 400 | 400 | ||||||||||||||||||
Operating expenses | 55,631 | 3,112 | 58,743 | 50,023 | 3,707 | 53,730 | ||||||||||||||||||
Operating income | $ | 21,218 | $ | 7,610 | $ | 28,828 | $ | 24,488 | $ | 3,715 | $ | 28,203 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 2,161 | $ | 1,359 | $ | 3,520 | $ | 1,765 | $ | 1,292 | $ | 3,057 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 955 | $ | 610 | $ | 1,565 | $ | 912 | $ | 1,367 | $ | 2,279 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 568,355 | $ | 170,641 | $ | 738,996 | $ | 484,178 | $ | 196,716 | $ | 680,894 |
Six Months Ended | ||||||||||||||||||||||||
September 30, 2017 | September 30, 2016 | |||||||||||||||||||||||
Technology | Financing | Total | Technology | Financing | Total | |||||||||||||||||||
Sales of product and services | $ | 714,839 | $ | - | $ | 714,839 | $ | 651,408 | $ | - | $ | 651,408 | ||||||||||||
Financing revenue | - | 21,106 | 21,106 | - | 15,709 | 15,709 | ||||||||||||||||||
Fee and other income | 2,029 | 28 | 2,057 | 2,764 | 84 | 2,848 | ||||||||||||||||||
Net sales | 716,868 | 21,134 | 738,002 | 654,172 | 15,793 | 669,965 | ||||||||||||||||||
Cost of sales, product and services | 570,386 | - | 570,386 | 518,051 | - | 518,051 | ||||||||||||||||||
Direct lease costs | - | 2,452 | 2,452 | - | 2,317 | 2,317 | ||||||||||||||||||
Cost of sales | 570,386 | 2,452 | 572,838 | 518,051 | 2,317 | 520,368 | ||||||||||||||||||
Selling, general, and administrative expenses | 105,004 | 6,000 | 111,004 | 93,515 | 6,146 | 99,661 | ||||||||||||||||||
Depreciation and amortization | 4,190 | 2 | 4,192 | 3,492 | 6 | 3,498 | ||||||||||||||||||
Interest and financing costs | - | 633 | 633 | - | 749 | 749 | ||||||||||||||||||
Operating expenses | 109,194 | 6,635 | 115,829 | 97,007 | 6,901 | 103,908 | ||||||||||||||||||
Operating income | $ | 37,288 | $ | 12,047 | $ | 49,335 | $ | 39,114 | $ | 6,575 | $ | 45,689 | ||||||||||||
Selected Financial Data - Statement of Cash Flow | ||||||||||||||||||||||||
Depreciation and amortization | $ | 4,256 | $ | 2,489 | $ | 6,745 | $ | 3,553 | $ | 2,279 | $ | 5,832 | ||||||||||||
Purchases of property, equipment and operating lease equipment | $ | 2,046 | $ | 1,390 | $ | 3,436 | $ | 1,564 | $ | 1,605 | $ | 3,169 | ||||||||||||
Selected Financial Data - Balance Sheet | ||||||||||||||||||||||||
Total assets | $ | 568,355 | $ | 170,641 | $ | 738,996 | $ | 484,178 | $ | 196,716 | $ | 680,894 |
Acquisition Date Amount | ||||
Accounts receivable and other assets | $ | 14,176 | ||
Property and equipment | 2,062 | |||
Identified intangible assets | 13,610 | |||
Accounts payable and other current liabilities | (12,483 | ) | ||
Total identifiable net assets | 17,365 | |||
Goodwill | 21,033 | |||
Total purchase consideration | $ | 38,398 |
Acquisition Date Amount | ||||
Accounts receivable and other current assets | $ | 7,501 | ||
Property and equipment | 1,045 | |||
Identified intangible assets | 3,340 | |||
Accounts payable and other current liabilities | (6,411 | ) | ||
Total identifiable net assets | 5,475 | |||
Goodwill | 7,614 | |||
Total purchase consideration | $ | 13,089 |
Acquisition Date Amount | Acquisition Date Amount | |||||||
Accounts receivable—trade, net | $ | 8,457 | ||||||
Property and equipment | 81 | |||||||
Accounts receivable and other assets | $ | 488 | ||||||
Identified intangible assets | 8,710 | 4,130 | ||||||
Accounts payable and other current liabilities | (8,641 | ) | (1,822 | ) | ||||
Deferred tax liability | (89 | ) | ||||||
Total identifiable net assets | 8,518 | 2,796 | ||||||
Goodwill | 8,131 | 7,189 | ||||||
Total purchase consideration | $ | 16,649 | $ | 9,985 |
Estimated Useful Lives (in years) | Acquisition Date Amount | |||||||
Intangible assets—customer relationships | 7 | $ | 7,680 | |||||
Intangible assets—trade names | 10 | 520 | ||||||
Intangible assets—backlog | 1 | 510 | ||||||
Total identified intangible assets | $ | 8,710 |
Acquisition Date Amount | ||||
Accounts receivable and other current assets | $ | 7,491 | ||
Property and equipment | 1,045 | |||
Identified intangible assets | 4,090 | |||
Accounts payable and other current liabilities | (5,786 | ) | ||
Total identifiable net assets | 6,840 | |||
Goodwill | 6,227 | |||
Total purchase consideration | $ | 13,067 |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
Sales of products and services | $ | 317,391 | $ | 287,859 | $ | 968,799 | $ | 871,814 | $ | 357,759 | $ | 361,227 | $ | 714,839 | $ | 651,408 | ||||||||||||||||
Adjusted gross billings of product and services (1) | $ | 432,407 | $ | 393,922 | $ | 1,317,188 | $ | 1,157,327 | $ | 503,581 | $ | 487,308 | $ | 985,266 | $ | 884,781 | ||||||||||||||||
Gross margin | 22.6 | % | 21.5 | % | 22.4 | % | 21.6 | % | 23.6 | % | 22.1 | % | 22.4 | % | 22.3 | % | ||||||||||||||||
Gross margin, product and services | 20.7 | % | 19.6 | % | 20.5 | % | 19.7 | % | 21.2 | % | 20.2 | % | 20.2 | % | 20.5 | % | ||||||||||||||||
Operating income margin | 6.5 | % | 5.9 | % | 6.7 | % | 6.6 | % | 7.8 | % | 7.6 | % | 6.7 | % | 6.8 | % | ||||||||||||||||
Net earnings | $ | 12,620 | $ | 10,297 | $ | 40,066 | $ | 34,790 | $ | 17,221 | $ | 16,775 | $ | 30,644 | $ | 27,446 | ||||||||||||||||
Net earnings margin | 4.6 | % | 4.5 | % | 4.2 | % | 4.1 | % | ||||||||||||||||||||||||
Net earnings per common share - diluted | $ | 1.81 | $ | 1.40 | $ | 5.71 | $ | 4.74 | $ | 1.23 | $ | 1.21 | $ | 2.19 | $ | 1.95 | ||||||||||||||||
Non-GAAP: Net earnings (2) | $ | 13,294 | $ | 10,694 | $ | 41,383 | $ | 35,840 | $ | 17,835 | $ | 17,130 | $ | 30,439 | $ | 28,089 | ||||||||||||||||
Non-GAAP: Net earnings per common share - diluted (2) | $ | 1.91 | $ | 1.46 | $ | 5.90 | $ | 4.89 | $ | 1.27 | $ | 1.23 | $ | 2.17 | $ | 2.00 | ||||||||||||||||
Adjusted EBITDA (3) | $ | 23,217 | $ | 18,976 | $ | 72,404 | $ | 63,111 | $ | 30,957 | $ | 29,926 | $ | 53,527 | $ | 49,187 | ||||||||||||||||
Adjusted EBITDA margin (3) | 7.1 | % | 6.4 | % | 7.3 | % | 7.0 | % | 8.3 | % | 8.1 | % | 7.3 | % | 7.3 | % | ||||||||||||||||
Purchases of property and equipment used internally | $ | 849 | $ | 506 | $ | 2,413 | $ | 1,700 | $ | 955 | $ | 912 | $ | 2,046 | $ | 1,564 | ||||||||||||||||
Purchases of equipment under operating leases | 3,282 | 884 | 4,887 | 15,308 | 610 | 1,367 | 1,390 | 1,605 | ||||||||||||||||||||||||
Total capital expenditures | $ | 4,131 | $ | 1,390 | $ | 7,300 | $ | 17,008 | $ | 1,565 | $ | 2,279 | $ | 3,436 | $ | 3,169 |
(1) | We define Adjusted gross billings of product and services as our sales of product and services calculated in accordance with US GAAP, adjusted to exclude the costs incurred related to sales of third party software assurance, subscription licenses, maintenance and services. We have provided below a reconciliation of Adjusted gross billings of product and services to Sales of product and services, which is the most directly comparable financial measure to this non-GAAP financial measure. |
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Sales of products and services | $ | 317,391 | $ | 287,859 | $ | 968,799 | $ | 871,814 | ||||||||
Costs incurred related to sales of third party services | 115,016 | 106,063 | 348,389 | 285,513 | ||||||||||||
Adjusted gross billings of product and services | $ | 432,407 | $ | 393,922 | $ | 1,317,188 | $ | 1,157,327 |
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Sales of products and services | $ | 357,759 | $ | 361,227 | $ | 714,839 | $ | 651,408 | ||||||||
Costs incurred related to sales of third party software assurance, maintenance and services | 145,822 | 126,081 | 270,427 | 233,373 | ||||||||||||
Adjusted gross billings of product and services | $ | 503,581 | $ | 487,308 | $ | 985,266 | $ | 884,781 |
(2) | Non-GAAP net earnings per common share are based on net earnings calculated in accordance with US GAAP, adjusted to exclude other income and acquisition related amortization expense, and related effects on income |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
GAAP: Earnings before tax | $ | 21,307 | $ | 17,645 | $ | 67,376 | $ | 59,372 | $ | 28,687 | $ | 28,583 | $ | 49,465 | $ | 46,069 | ||||||||||||||||
Less: Other income | - | - | (380 | ) | - | |||||||||||||||||||||||||||
Plus: Acquisition related amortization expense | 1,035 | 680 | 3,098 | 1,793 | ||||||||||||||||||||||||||||
Acquisition related amortization expense | 1,186 | 974 | 2,307 | 2,063 | ||||||||||||||||||||||||||||
Other (income) expense | 141 | (380 | ) | (130 | ) | (380 | ) | |||||||||||||||||||||||||
Non-GAAP: Earnings before provision for income taxes | 30,014 | 29,177 | 51,642 | 47,752 | ||||||||||||||||||||||||||||
Non-GAAP: Earnings before provision for income taxes | 22,342 | 18,325 | 70,094 | 61,165 | ||||||||||||||||||||||||||||
GAAP: Provision for income taxes | 11,466 | 11,808 | 18,821 | 18,623 | ||||||||||||||||||||||||||||
Acquisition related amortization expense | 450 | 324 | 874 | 689 | ||||||||||||||||||||||||||||
Other (income) expense | 59 | (157 | ) | (55 | ) | (157 | ) | |||||||||||||||||||||||||
Tax benefit on restricted stock | 204 | 72 | 1,563 | 508 | ||||||||||||||||||||||||||||
Non-GAAP: Provision for income taxes | 9,048 | 7,631 | 28,711 | 25,325 | 12,179 | 12,047 | 21,203 | 19,663 | ||||||||||||||||||||||||
Non-GAAP: Net earnings | $ | 13,294 | $ | 10,694 | $ | 41,383 | $ | 35,840 | $ | 17,835 | $ | 17,130 | $ | 30,439 | $ | 28,089 | ||||||||||||||||
GAAP: Net earnings per common share - diluted | $ | 1.81 | $ | 1.40 | $ | 5.71 | $ | 4.74 | $ | 1.23 | $ | 1.21 | $ | 2.19 | $ | 1.95 | ||||||||||||||||
Non-GAAP: Net earnings per common share - diluted | $ | 1.91 | $ | 1.46 | $ | 5.90 | $ | 4.89 | $ | 1.27 | $ | 1.23 | $ | 2.17 | $ | 2.00 |
(3) | We define Adjusted EBITDA as net earnings calculated in accordance with US GAAP, adjusted for the following: interest expense, depreciation and amortization, provision for income taxes, and other income. |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||
Consolidated | 2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Net earnings | $ | 12,620 | $ | 10,297 | $ | 40,066 | $ | 34,790 | $ | 17,221 | $ | 16,775 | $ | 30,644 | $ | 27,446 | ||||||||||||||||
Provision for income taxes | 8,687 | 7,348 | 27,310 | 24,582 | 11,466 | 11,808 | 18,821 | 18,623 | ||||||||||||||||||||||||
Depreciation and amortization | 1,910 | 1,331 | 5,408 | 3,739 | 2,129 | 1,723 | 4,192 | 3,498 | ||||||||||||||||||||||||
Less: Other income | - | - | (380 | ) | - | |||||||||||||||||||||||||||
Other (income) expense | 141 | (380 | ) | (130 | ) | (380 | ) | |||||||||||||||||||||||||
Adjusted EBITDA | $ | 23,217 | $ | 18,976 | $ | 72,404 | $ | 63,111 | $ | 30,957 | $ | 29,926 | $ | 53,527 | $ | 49,187 | ||||||||||||||||
Technology Segment | ||||||||||||||||||||||||||||||||
Operating income | $ | 16,889 | $ | 14,671 | $ | 56,003 | $ | 50,345 | $ | 21,218 | $ | 24,488 | $ | 37,288 | $ | 39,114 | ||||||||||||||||
Plus: Depreciation and amortization | 1,908 | 1,327 | 5,400 | 3,728 | ||||||||||||||||||||||||||||
Depreciation and amortization | 2,128 | 1,721 | 4,190 | 3,492 | ||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 18,797 | $ | 15,998 | $ | 61,403 | $ | 54,073 | $ | 23,346 | $ | 26,209 | $ | 41,478 | $ | 42,606 | ||||||||||||||||
Financing Segment | ||||||||||||||||||||||||||||||||
Operating income | $ | 4,418 | $ | 2,974 | $ | 10,993 | $ | 9,027 | $ | 7,610 | $ | 3,715 | $ | 12,047 | $ | 6,575 | ||||||||||||||||
Plus: Depreciation and amortization | 2 | 4 | 8 | 11 | ||||||||||||||||||||||||||||
Depreciation and amortization | 1 | 2 | 2 | 6 | ||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 4,420 | $ | 2,978 | $ | 11,001 | $ | 9,038 | $ | 7,611 | $ | 3,717 | $ | 12,049 | $ | 6,581 |
· | Portfolio income: Interest income from financing receivables and rents due under operating leases; |
· | Transactional gains: Net gains or losses on the sale of financial assets; and |
· | Post-contract earnings: Month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and net gains on the sale of off-lease (used) equipment. |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of product and services | $ | 317,391 | $ | 287,859 | $ | 29,532 | 10.3 | % | $ | 968,799 | $ | 871,814 | $ | 96,985 | 11.1 | % | $ | 357,759 | $ | 361,227 | $ | (3,468 | ) | (1.0 | %) | $ | 714,839 | $ | 651,408 | $ | 63,431 | 9.7 | % | |||||||||||||||||||||||||||||||
Fee and other income | 915 | 1,506 | (591 | ) | (39.2 | %) | 3,679 | 5,038 | (1,359 | ) | (27.0 | %) | 1,043 | 1,488 | (445 | ) | (29.9 | %) | 2,029 | 2,764 | (735 | ) | (26.6 | %) | ||||||||||||||||||||||||||||||||||||||||
Net sales | 318,306 | 289,365 | 28,941 | 10.0 | % | 972,478 | 876,852 | 95,626 | 10.9 | % | 358,802 | 362,715 | (3,913 | ) | (1.1 | %) | 716,868 | 654,172 | 62,696 | 9.6 | % | |||||||||||||||||||||||||||||||||||||||||||
Cost of sales, product and services | 251,729 | 231,503 | 20,226 | 8.7 | % | 769,780 | 700,429 | 69,351 | 9.9 | % | 281,953 | 288,204 | (6,251 | ) | (2.2 | %) | 570,386 | 518,051 | 52,335 | 10.1 | % | |||||||||||||||||||||||||||||||||||||||||||
Gross profit | 66,577 | 57,862 | 8,715 | 15.1 | % | 202,698 | 176,423 | 26,275 | 14.9 | % | 76,849 | 74,511 | 2,338 | 3.1 | % | 146,482 | 136,121 | 10,361 | 7.6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Professional and other fees | 1,216 | 1,608 | (392 | ) | (24.4 | %) | 4,138 | 4,175 | (37 | ) | (0.9 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Salaries and benefits | 40,155 | 35,043 | 5,112 | 14.6 | % | 117,822 | 101,471 | 16,351 | 16.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 6,409 | 5,203 | 1,206 | 23.2 | % | 19,335 | 16,653 | 2,682 | 16.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses | 53,503 | 48,302 | 5,201 | 10.8 | % | 105,004 | 93,515 | 11,489 | 12.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 1,908 | 1,327 | 581 | 43.8 | % | 5,400 | 3,728 | 1,672 | 44.8 | % | 2,128 | 1,721 | 407 | 23.6 | % | 4,190 | 3,492 | 698 | 20.0 | % | ||||||||||||||||||||||||||||||||||||||||||||
Interest and financing costs | - | 10 | (10 | ) | (100.0 | %) | - | 51 | (51 | ) | (100.0 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | 49,688 | 43,191 | 6,497 | 15.0 | % | 146,695 | 126,078 | 20,617 | 16.4 | % | 55,631 | 50,023 | 5,608 | 11.2 | % | 109,194 | 97,007 | 12,187 | 12.6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 16,889 | $ | 14,671 | $ | 2,218 | 15.1 | % | $ | 56,003 | $ | 50,345 | $ | 5,658 | 11.2 | % | $ | 21,218 | $ | 24,488 | $ | (3,270 | ) | (13.4 | %) | $ | 37,288 | $ | 39,114 | $ | (1,826 | ) | (4.7 | %) | ||||||||||||||||||||||||||||||
Key business metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted gross billings of product and services | $ | 503,581 | $ | 487,308 | $ | 16,273 | 3.3 | % | $ | 985,266 | $ | 884,781 | $ | 100,485 | 11.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 18,797 | $ | 15,998 | $ | 2,799 | 17.5 | % | $ | 61,403 | $ | 54,073 | $ | 7,330 | 13.6 | % | $ | 23,346 | $ | 26,209 | $ | (2,863 | ) | (10.9 | %) | $ | 41,478 | $ | 42,606 | $ | (1,128 | ) | (2.6 | %) |
Quarter Ended | Sequential | Year over Year | ||||||
September 30, 2017 | 0.2 | % | (1.0 | %) | ||||
June 30, 2017 | 11.1 | % | 23.1 | % | ||||
March 31, 2017 | 1.3 | % | 10.3 | % | ||||
December 31, 2016 | (12.1 | %) | 10.3 | % | ||||
September 30, 2016 | 24.5 | % | 11.4 | % |
Quarter Ended | Sequential | Year over Year | |||||||
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 | % | |||||
December 31, 2015 | (11.2 | %) | (2.6 | %) | |||||
September 30, 2015 | 24.9 | % | 13.1 | % |
Twelve Months Ended December 31, | Twelve Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | Change | 2017 | 2016 | Change | |||||||||||||||||||
Revenue by customer end market: | ||||||||||||||||||||||||
Technology | 24 | % | 23 | % | 1 | % | ||||||||||||||||||
SLED | 21 | % | 23 | % | (2 | %) | 18 | % | 22 | % | (4 | %) | ||||||||||||
Technology | 22 | % | 23 | % | (1 | %) | ||||||||||||||||||
Telecom, Media & Entertainment | 16 | % | 14 | % | 2 | % | 15 | % | 15 | % | - | |||||||||||||
Financial Services | 14 | % | 12 | % | 2 | % | ||||||||||||||||||
Healthcare | 11 | % | 10 | % | 1 | % | 12 | % | 10 | % | 2 | % | ||||||||||||
Financial Services | 12 | % | 12 | % | - | |||||||||||||||||||
Other | 18 | % | 18 | % | - | 17 | % | 18 | % | (1 | %) | |||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||
Revenue by vendor: | ||||||||||||||||||||||||
Cisco Systems | 49 | % | 49 | % | - | 48 | % | 49 | % | (1 | %) | |||||||||||||
HP Inc. & HPE | 6 | % | 7 | % | (1 | %) | 5 | % | 6 | % | (1 | %) | ||||||||||||
NetApp | 5 | % | 6 | % | (1 | %) | 6 | % | 5 | % | 1 | % | ||||||||||||
Sub-total | 60 | % | 62 | % | (2 | %) | 59 | % | 60 | % | (1 | %) | ||||||||||||
Other | 40 | % | 38 | % | 2 | % | 41 | % | 40 | % | 1 | % | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended December 31, | Nine Months Ended December 31, | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing revenue | $ | 8,190 | $ | 9,289 | $ | (1,099 | ) | (11.8 | %) | $ | 23,899 | $ | 27,914 | $ | (4,015 | ) | (14.4 | %) | $ | 12,035 | $ | 8,722 | $ | 3,313 | 38.0 | % | $ | 21,106 | $ | 15,709 | $ | 5,397 | 34.4 | % | ||||||||||||||||||||||||||||||
Fee and other income | 161 | (10 | ) | 171 | 1710.0 | % | 245 | 30 | 215 | 716.7 | % | 8 | 25 | (17 | ) | (68.0 | %) | 28 | 84 | (56 | ) | (66.7 | %) | |||||||||||||||||||||||||||||||||||||||||
Net sales | 8,351 | 9,279 | (928 | ) | (10.0 | %) | 24,144 | 27,944 | (3,800 | ) | (13.6 | %) | 12,043 | 8,747 | 3,296 | 37.7 | % | 21,134 | 15,793 | 5,341 | 33.8 | % | ||||||||||||||||||||||||||||||||||||||||||
Direct lease costs | 1,142 | 3,081 | (1,939 | ) | (62.9 | %) | 3,459 | 9,256 | (5,797 | ) | (62.6 | %) | 1,321 | 1,325 | (4 | ) | (0.3 | %) | 2,452 | 2,317 | 135 | 5.8 | % | |||||||||||||||||||||||||||||||||||||||||
Gross profit | 7,209 | 6,198 | 1,011 | 16.3 | % | 20,685 | 18,688 | 1,997 | 10.7 | % | 10,722 | 7,422 | 3,300 | 44.5 | % | 18,682 | 13,476 | 5,206 | 38.6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Professional and other fees | 181 | 274 | (93 | ) | (33.9 | %) | 780 | 738 | 42 | 5.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Salaries and benefits | 2,230 | 2,329 | (99 | ) | (4.3 | %) | 6,657 | 6,855 | (198 | ) | (2.9 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | (31 | ) | 231 | (262 | ) | (113.4 | %) | 1,089 | 737 | 352 | 47.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses | 2,837 | 3,305 | (468 | ) | (14.2 | %) | 6,000 | 6,146 | (146 | ) | (2.4 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 2 | 4 | (2 | ) | (50.0 | %) | 8 | 11 | (3 | ) | (27.3 | %) | 1 | 2 | (1 | ) | (50.0 | %) | 2 | 6 | (4 | ) | (66.7 | %) | ||||||||||||||||||||||||||||||||||||||||
Interest and financing costs | 409 | 386 | 23 | 6.0 | % | 1,158 | 1,320 | (162 | ) | (12.3 | %) | 274 | 400 | (126 | ) | (31.5 | %) | 633 | 749 | (116 | ) | (15.5 | %) | |||||||||||||||||||||||||||||||||||||||||
Operating expenses | 2,791 | 3,224 | (433 | ) | (13.4 | %) | 9,692 | 9,661 | 31 | 0.3 | % | 3,112 | 3,707 | (595 | ) | (16.1 | %) | 6,635 | 6,901 | (266 | ) | (3.9 | %) | |||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 4,418 | $ | 2,974 | $ | 1,444 | 48.6 | % | $ | 10,993 | $ | 9,027 | $ | 1,966 | 21.8 | % | $ | 7,610 | $ | 3,715 | $ | 3,895 | 104.8 | % | $ | 12,047 | $ | 6,575 | $ | 5,472 | 83.2 | % | ||||||||||||||||||||||||||||||||
Key business metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 4,420 | $ | 2,978 | $ | 1,442 | 48.4 | % | $ | 11,001 | $ | 9,038 | $ | 1,963 | 21.7 | % | $ | 7,611 | $ | 3,717 | $ | 3,894 | 104.8 | % | $ | 12,049 | $ | 6,581 | $ | 5,468 | 83.1 | % |
Nine Months Ended December 31, | Six Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
Net provided by (cash used) in operating activities | $ | 29,702 | $ | (17,717 | ) | |||||||||||
Net cash provided by (used in) operating activities | $ | 13,330 | $ | (43,806 | ) | |||||||||||
Net cash used in investing activities | (47,040 | ) | (44,344 | ) | (52,891 | ) | (18,648 | ) | ||||||||
Net cash provided by (used in) financing activities | (8,205 | ) | 52,479 | (10,046 | ) | 15,330 | ||||||||||
Effect of exchange rate changes on cash | 454 | (26 | ) | 32 | 393 | |||||||||||
Net decrease in cash and cash equivalents | $ | (25,089 | ) | $ | (9,608 | ) | ||||||||||
Net Decrease in Cash and Cash Equivalents | $ | (49,575 | ) | $ | (46,731 | ) |
As of December 31, | ||||||||
2016 | 2015 | |||||||
Days sales outstanding (1) | 52 | 56 | ||||||
Days inventory outstanding (2) | 23 | 6 | ||||||
Days payable outstanding (3) | (48 | ) | (42 | ) | ||||
Cash conversion cycle | 27 | 20 |
As of September 30, | ||||||||
2017 | 2016 | |||||||
(DSO) Days sales outstanding (1) | 52 | 54 | ||||||
(DIO) Days inventory outstanding (2) | 15 | 13 | ||||||
(DPO) Days payable outstanding (3) | (44 | ) | (51 | ) | ||||
Cash conversion cycle | 23 | 16 |
(1) | Represents the rolling three-month average of the balance of trade accounts receivable-trade, net for our Technology segment at the end of the period divided by Adjusted gross billings of product and services for the same three-month period. |
(2) | Represents the rolling three-month average of the balance of inventory, net for our Technology segment at the end of the period divided by Cost of adjusted gross billings of product and services for the same three-month period. |
(3) | Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our Technology segment at the end of the period divided by Cost of adjusted gross billings of product and services for the same three-month period. |
Maximum Credit Limit at December 31, 2016 | Balance as of December 30, 2016 | Maximum Credit Limit at March 31, 2016 | Balance as of March 31, 2016 | |||||||||||||||||||||||||
Maximum Credit Limit at September 30, 2017 | Maximum Credit Limit at September 30, 2017 | Balance as of September 30, 2017 | Maximum Credit Limit at March 31, 2017 | Balance as of March 31, 2017 | ||||||||||||||||||||||||
$ | 250,000 | $ | 120,854 | $ | 250,000 | $ | 121,893 | 325,000 | $ | 120,217 | $ | 250,000 | $ | 132,612 |
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 | 113,035 | $ | 80.70 | 113,035 | 270,663 | (2 | ) | |||||||||||||
May 1, 2016 through May 31, 2016 | 78,659 | $ | 81.59 | 78,659 | 192,004 | (3 | ) | |||||||||||||
June 1, 2016 through June 30, 2016 | 64,834 | $ | 84.78 | 35,098 | 156,906 | (4 | ) | |||||||||||||
July 1, 2016 through July 31, 2016 | 83,510 | $ | 82.47 | 83,510 | 73,396 | (5 | ) | |||||||||||||
August 1, 2016 through August 16, 2016 | 18,179 | $ | 82.88 | 18,179 | 55,217 | (6 | ) | |||||||||||||
August 19, 2016 through August 31, 2016 | - | $ | - | - | 500,000 | (7 | ) | |||||||||||||
September 1, 2016 through September 30, 2016 | - | $ | - | - | 500,000 | (8 | ) | |||||||||||||
October 1, 2016 through October 31, 2016 | - | $ | - | - | 500,000 | (9 | ) | |||||||||||||
November 1, 2016 through November 30, 2016 | - | $ | - | - | 500,000 | (10 | ) | |||||||||||||
December 1, 2016 through December 31, 2016 | - | $ | - | - | 500,000 | (11 | ) |
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, 2017 through April 30, 2017 | - | $ | - | - | 1,000,000 | (2 | ) | |||||||||||||
May 1, 2017 through May 31, 2017 | - | $ | - | - | 1,000,000 | (3 | ) | |||||||||||||
June 1, 2017 through June 30, 2017 | 54,546 | $ | 75.72 | - | 1,000,000 | (4 | ) | |||||||||||||
July 1, 2017 through July 31, 2017 | 3,179 | $ | 79.50 | - | 1,000,000 | (5 | ) | |||||||||||||
August 1, 2017 through August 18, 2017 | - | $ | - | - | 1,000,000 | (6 | ) | |||||||||||||
August 19, 2017 through August 31, 2017 | - | $ | - | - | 500,000 | (7 | ) | |||||||||||||
September 1, 2017 through September 30, 2017 | - | $ | - | - | 500,000 | (8 | ) |
(1) |
(2) | The share purchase authorization in place for the month ended April 30, |
(3) | The share purchase authorization in place for the month ended May 31, |
(4) | The share purchase authorization in place for the month ended June 30, |
(5) | The share purchase authorization in place for the month ended July 31, |
(6) | As of August |
(7) | On August |
(8) | The share purchase authorization in place for the month ended September 30, |
Amended and Restated Employment Agreement effective September 6, 2017 , by and between ePlus inc. and Mark P. Marron, (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 7, 2017). | |
Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Phillip G. Norton, (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on September 7, 2017). | |
Amended and Restated Employment Agreement effective September 6, 2017, by and between ePlus inc. and Elaine D. Marion, (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on September 7, 2017). | |
Amendment No. 5, dated July 27, 2017, to Amended and Restated Agreement for Wholesale Financing between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 3, 2017). | |
Amendment No. 5, dated July 27, 2017, to Amended and Restated Agreement for Business Financing between ePlus Technology, inc. and Wells Fargo Commercial Distribution Finance, LLC (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 3, 2017). | |
2017 Non-Employee Director Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 14, 2017). | |
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 | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
ePlus inc. | |||
Date: | November 2, 2017 | /s/ MARK P. MARRON | |
By: Mark P. Marron, | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) | |||
Date: | November 2, 2017 | /s/ ELAINE D. MARION | |
By: Elaine D. Marion | |||
Chief Financial Officer | |||
(Principal Financial Officer) |