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DISCONTINUED OPERATIONS | 3 Months Ended
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Jun. 30, 2025
DISCONTINUED OPERATIONS [Abstract] |
DISCONTINUED OPERATIONS | 4. DISCONTINUED OPERATIONS On June 30, 2025, we completed the sale of HoldCo to Marlin Leasing Corporation pursuant to the Membership Interest Purchase Agreement dated June 20, 2025, thereby selling our domestic financing business. In the transaction, we received net cash proceeds of $156.7 million, consisting of cash proceeds of $180.1 million less cash transferred of $23.4 million, recognized a receivable of $7.8 million related to a post-closing adjustment process based on the book value of the assets associated with HoldCo and other adjustments, and recognized a contingent consideration asset of $13.5 million. See Note 13, “Fair Value of Financial Instruments” for a discussion of our contingent consideration asset. We incurred approximately $4.0 million in transaction costs during our quarter ended June 30, 2025, which are netted against the gain on sale of HoldCo before income taxes. In connection with the sale, we entered into a transition services agreement, pursuant to which ePlus and Marlin Leasing Corporation will provide certain transition services to each other after the sale. The sale of our domestic financing business positions us going forward as a pure-play technology solutions provider and represents a strategic shift in our operations. Consequently, our financial statements present our financial results for all periods, and we are retrospectively presenting the results of our domestic financing business as discontinued operations. The following table provides our operating results of discontinued operations for the three months ended June 30, 2025, and 2024 (in thousands):
| Three months ended June 30,
| 2025 |  | 2024
Net sales | $ | 15,811 |  |  | $ | 8,886 |
Cost of sales |  | 1,734 |  |  |  | 1,279 |
Gross profit |  | 14,077 |  |  |  | 7,607 |
Selling, general, and administrative |  | 3,599 |  |  |  | 3,012 |
Interest and financing costs |  | 450 |  |  |  | 585 |
Operating expenses |  | 4,049 |  |  |  | 3,597 |
Operating income |  | 10,028 |  |  |  | 4,010 |
Other income—net |  | 211 |  |  |  | 362 |
Earnings before gain from sale and income taxes |  | 10,239 |  |  |  | 4,372 |
Gain from sale of HoldCo before income taxes |  | 4,368 |  |  |  | - |
Earnings before income taxes |  | 14,607 |  |  |  | 4,372 |
Provision for income taxes |  | 4,038 |  |  |  | 1,226 |
Earnings from discontinued operations, net of tax | $ | 10,569 |  |  | $ | 3,146 |
The following table provides the major classes of assets and liabilities that are classified as discontinued operations as of March 31, 2025 (in thousands):
|  | March 31, 2025 |
ASSETS |  |  |
Accounts receivable | $ | 34,610 |
Financing receivables—net, current |  | 168,392 |
Other current assets |  | 19,397 |
Current assets of discontinued operations | $ | 222,399 |
Financing receivables and operating leases—net | $ | 126,408 |
Other assets—long-term |  | 7,427 |
Non-current assets of discontinued operations | $ | 133,835 |
LIABILITIES |  |  |
Accounts payable | $ | 127,154 |
Salaries and commissions payable |  | 2,812 |
Non-recourse notes payable—current |  | 27,456 |
Other current liabilities |  | 9,041 |
Current liabilities of discontinued operations | $ | 166,463 |
Non-recourse notes payable—long-term |  | 11,317 |
Other liabilities—long-term |  | 1,229 |
Non-current liabilities of discontinued operations | $ | 12,546 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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