Good day, ladies and gentlemen, and welcome to the ePlus Earnings Results Conference Call. [Operator Instructions] Today's conference is being recorded. I would now like to turn the call over to Kley Parkhurst.

Thank you, Tammy, and thank you, everyone, for joining us today. With me today are Phil Norton, Chairman, President and CEO of ePlus; Elaine Marion, our Chief Financial Officer; and Erica Stoecker, our General Counsel. I want to take a moment to remind you that the statements we make this afternoon that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections. Actual and anticipated future results may vary materially due to certain risks and uncertainties detailed in the earnings release we issued yesterday and our periodic filings with the Securities and Exchange Commission, including our Form 10-K for the year ended March 31, 2013 when filed. The company undertakes no responsibility to update any of these forward-looking statements in light of new information or future events. I'd now like to turn the call over to Phil Norton. Phil?

Thank you, Kley. We concluded the fiscal year with solid fourth quarter and year-end results as customers increasingly purchased our multi-vendor, complex, advanced technology solutions to fulfill their IT requirements. For our fiscal year ended March 31, 2013, total revenue increased 19.1% to $983.1 million, an increase of $157.5 million. Net earnings increased 49.1%, $34.8 million for the year or $4.32 per diluted share as compared to $23.4 million or $2.79 per diluted share during the year ended March 31, 2012. For the fiscal fourth quarter, total revenues increased 7.9% to $236.3 million compared to $219 million the prior year. Net earnings increased 99.7% to $7.7 million, and fully diluted earnings per common share increased 97.9% to $0.95 per share as compared to $0.48 per share in the prior period. In the fiscal year 2013, we made significant progress in our long-term growth plan, which includes building a national footprint, increasing our ability to sell key solutions by growing our services portfolio, adding to our technical capabilities and increasing our managed services offering. While we characterize fiscal year 2012 as a year of investment, in that we acquired 3 companies and opened 2 new regions during the year, in fiscal year '13 -- 2013, we focused on optimizing on the acquired operations, integrating our acquired Managed Services businesses and expanding our engineering capabilities to improve our services delivery offerings. In addition, we further broadened our geographic presence in New England and Phoenix and expanded our service offerings to better serve our customers. One of our primary customer focus points in fiscal year 2013 was to provide services and products to help our customers efficiently and cost effectively navigate the numerous and complex choices available in today's technology market. Whether cloud, BYOD, security or the numerous other technologies available on the…

Thank you, Phil. As Phil mentioned, we continue to drive strong revenue growth as consolidated revenues for our fourth quarter grew 7.9% to $236.3 million, the 13th quarter of revenue growth on a year-over-year basis. Net earnings also increased 99.7% to $7.7 million for the quarter and fully diluted earnings per common share increased 97.9% to $0.95 per share. The growth in quarterly revenues is attributable to increases in both the technology and financing segments. In the technology segment, revenue for the quarter increased 6.7% to $225.7 million compared to $211.5 million in the quarter ended March 31, 2012. The increase in revenue was due to increases in customer demand for products and services, particularly from our Fortune 100 customers. In the financing segment, revenues for the quarter increased 41.1% to $10.6 million compared to $7.5 million in the quarter ended March 31, 2012. The increase in revenues was driven by higher net gains on sales of financial assets, higher portfolio revenue and higher post-contract earnings related to the early termination of certain leases. ePlus continues to offer the products and services that customers desire, including financial services, and we are effectively capturing IT spend at a higher rate than the overall market as a result of our unique set of solutions. On a consolidated basis, for the year ended March 31, 2013, total revenue increased 19.1% to $983.1 million. Our technology segment had revenues of $943.2 million, an increase of 19% as compared to the prior year. The increase was due to increases in demand as we captured additional customer spend and focused on faster growing segments within the market, such as virtualization, collaboration and security. Revenues for the year in our financing segment increased 20.4% to $39.9 million due to an increase in net gains associated with early…

[Operator Instructions] The first question comes from Alex Kurtz from Stern.

How are you guys gauging the opportunity to roll up on a smaller regional VARs with your cash as opposed to returning cash to shareholders? So what does that calculation look like for you guys?

Well, first of all, I don't think that we look at it as roll-up. We look at it as more of a strategic investment for things that will improve our capabilities both in technology and in customer set. We have -- we are always looking at new opportunities that will make a difference. And we have a plan in which we were trying to expand via -- have a national footprint and we feel at the present time that we will be looking at those opportunities.

And then what's the calculation about using cash to do that while you've been talking about returning cash to shareholders? How would that work out?

We intend to use cash. We have not borrowed to buy companies. We think we have enough cash to do that. As far as returning cash to shareholders, I think that's something that we always consider and -- but we have no specific direction on that right now.

And just my last question, when you look at the competition against some of the other national VARs that you're competing against, what's the timeframe that you have internally there to -- where you would like to see yourself 3 to 5 years competing against some of those guys who are slightly bigger? Is it 12 months, 24 months, 36 months?

Well, first of all, we don't believe that there's anyone out there right now that we compete against that has better capabilities than we do. And in most cases, we think that our capabilities are better. We compete head-to-head all the time. We won more than our fair share and we're able to maintain our customers, and that's one of the reasons we have had continuous growth. And we believe that, in our case, we are very engineering-oriented and we provide as good or better services than any of the players that you had indicated that are bigger. And I don't think at this point in time, there's a differentiation between us and them in providing those services.

The next question comes from Gunnar Hansen from Sidoti. Gunnar Hansen - Sidoti & Company, LLC: Just in terms of, staying on topic with the engineering and sales force there. I mean, what are kind of the future plan, I guess, for this upcoming year to expand either one of those groups in terms of magnitude, in both specific geographic regions that you guys are looking to expand into?

Well, for the most part, we're getting pretty close to having a national footprint. We have a few places left that we have to go, but we're always looking for top talent to improve our capabilities, and that includes engineering and sales. I think in the engineering side, we're up some -- I think, 18% or some number like that, and most of those people are extremely high-talented individuals. We have had significant success in recruiting more engineers and salespeople from vendors who have had great performances at the companies they're in, which give us a higher degree of technology expertise in different subject matters. And we feel that we'll continue to recruit from vendors because we think that we have a higher degree of success. Gunnar Hansen - Sidoti & Company, LLC: Okay. And any sort of -- in terms of magnitude, any quantity of people that you guys kind of have a target in terms of hiring this year in either one of those segments?

Actually, we don't really have a target and we try to improve the operation everywhere and improve the capabilities. But on the projection side, we are more focused on finding the best people out there to fill the needs we have, and we have those set number. Gunnar Hansen - Sidoti & Company, LLC: All right. And I guess, Elaine, just trying to get a sense of -- particularly in the fourth quarter, you mentioned some strong growth from some of the Fortune 100 customers. Any sort of indication at how some of the other non-Fortune 100 customers performed? And care to give us any breakdown in terms of what percentage of sales each of those groups make?

The Fortune 100 customers did perform as we expected as did the non-Fortune 100 customers. We don't break that down into percentages per se, but we did not see sales that were below our expectations in terms of either of the group. Gunnar Hansen - Sidoti & Company, LLC: Okay. And I guess going forward, is it fair to say that the Fortune 100 will still kind of dominate the growth going forward? How do some of those budgets break down in terms of what you guys are seeing?

I would say that -- we don't necessarily say that the Fortune 100 would dominate growth. We feel that both of the groups will contribute to our growth as they have done in the past.

I think as -- and also important to add, we have 2,000 customers and by no means do we have all-spend in those customers and we feel like that we can grow at a very high rate by taking more market share away from our competitors and our own customer base as well as new logos. So we don't really have a view that the economy is going to have effect on our growth. Gunnar Hansen - Sidoti & Company, LLC: Great. And I guess just kind of lastly, in terms of transitioning into the cloud, I mean, have you guys kind of disclosed what percentage of the sales that is and how you guys kind of target that for the future down the road, 1, 2 years down the road?

Once you can find someone that can target that right now, I'd like to know that. There's still a lot of hype -- there's still a lot of changes going on daily, whether it's VMware or Verizon or AT&T or Amazon, they're all out there on public and private clouds. And I think right now the best offering that we see for our customer base is to be able to evaluate when they can use those and help them develop their own private cloud offerings. And we feel like that will be a significant part of our business for the foreseeable future. Gunnar Hansen - Sidoti & Company, LLC: And any sort of indication as to what percentage of sales that currently is for you guys or...

It's kind of difficult to determine that because it's -- our customer base is so widespread, I don't really think that I have an answer for that today.

The next question comes from John Lewis from Osmium Partners.

Just a couple of quick questions, some of my questions have been answered. But I know over the last year or so, you guys have brought on a number of salespeople over the last couple of years. I guess in terms of productivity and expectations of that sales force, how is that playing out in terms of your expectations?

Our expectations is always higher than results when you're looking at sales. And goals are very difficult to meet because we do expect a lot. But I think that for the most part, the salespeople that we have, have contributed significantly to our growth, and we're opportunistic in that way. If we have good salespeople that we can hire, we do, that brings new logos. But we feel satisfied with where we are today that our sales and engineering staff is competitive with anybody in the industry.

Well, I was just looking at one of your old presentations. A couple of years ago, I think August 2010, you had 268 salespeople. Today, from your January presentation, you have 354 and then you have the technical support as well. So I guess the question is in terms of sales force productivity, is it being driven from cross-selling to current customers or bringing on new customers because I know you've been around 2,000 customers for awhile?

Well, we continue to get new logos every quarter at a high rate, so we have opportunity and I think our customers are now 2,300 versus 2,000, so we are growing not only with new logos. But then on -- one of our strategic plans for the future is to go wider and deeper in each one of our accounts and we feel like we have relatively small amount of spend when you really look at those accounts in general. And we have invested in telesales to help find new opportunities in those accounts and we think that we will continue to grow by cross-selling. And I might add, one of the actual things that we look at in acquisitions are what are fits we have today and other opportunities with acquisitions where they may sell just storage, may sell just servers and we can go and then sell them network and work on data centers and cross-sell our products. And we've seen that as a big advantage every time we've made an acquisition.

So when you look at your customer base today and you look at the technology partners that you have in your portfolio, I think you said 48% of your sales comes from Cisco. When you look at the other, VMware and the other partners you have relative to the spend you're getting, how much of an opportunity is there in just -- in getting more of the full spend with the customer versus bringing on new customers?

I think that's something everyone has a hard time judging, but we have a lot of effort in getting more spend with our customers. We seem to see more of them looking to go to one provider versus several. We think we're in a good position to do that and that's one of the things we work at every day is to get our sales force out there to call on CFOs and CIOs and higher-level people in order to expand our breadth.

Got it. I appreciate that. I guess just one last question on this front -- let me just change gear for a sec. I think last call you talked about the -- with the government -- federal government sequester the opportunity to make progress on the leasing side with the federal government. Any updates on that?

We still think that's an opportunity. I think right now the government is adjusting to what they can spend and not spend. But what we've seen in the past and we hope will be for the future is that when they have difficulty finding operating budgets in a year, they then start looking to spread those payments out which increases the opportunity for leasing and also increases the opportunity for us to bring new vendors on board that we can assist in government financing as well as commercial.

But is the -- if it hasn't shown up now, given the difficulties, do you think it shows up sooner than later? How do you think that plays out?

Well, we're seeing a lot of activity early on in the game. It's -- I think we get our fair share today and maybe a little bit more, and we think that opportunity will increase.

In terms of the first question, in terms of cross-selling versus new customers, how does your proprietary software OneSource play into getting a bigger spend of a company's budget? Do you find that OneSource is an effective tool to getting -- to becoming a single source provider for a company, or how does that play into your advantage?

Well, I think it's an advantage for other companies out there, too, that have similar products. I think, ultimately, as I kind of mentioned before, customers are looking for OneSource and being able to provide technology service process. Everyday process becomes more important, becomes a bigger requirement as a public company. And it enables vendors to also have information about when in the cycle the products are, what made these renewals are and we think that we can capture a significant amount of that business. And our goal, so far, we met what we've looked to doing as far as gaining every year and having more customers on OneSource.

The next question comes from Andrew Fleming from Heartland Advisors.

Elaine, I just had a question on the margin profile. Opex, the gross profit margin ticked up a bit this quarter. And given the improving mix and the operating leverage inherent in your model, I mean is 7% to 8% operating margin on the horizon?

That's difficult to answer. That's sort of forward-looking. We believe that we can continue to grow our revenue and we can continue to optimize our operating costs. We believe that our margins for the year-end are sustainable, but they are subject to variability based on product mix, the types of products and services that we sell to our customers as well as the rebates that we've received.

Your next question comes from Gregg Hillman from First Wilshire.

I was wondering if you could touch on a couple of points. First, more in terms of like the big strategy, does it make sense for you to become more of a systems integrator and buy a software company at some point?

First of all, I think we're well on our way. And a good part of our business is being a systems integrator. As far as the software side, we do sell and implement certain software solutions in helping to build cloud. I think one of the things that differentiates us from most of our competitors is we never chose one path. Even though we have Cisco as a big provider, we have expertise on different storage vendors as well as servers and security and other vendors that are required to actually deliver cloud services. And I think that's what differentiates us between other people, and I think we'll stay on that path.

Okay. Actually, so you just raised another point about being agnostic in terms of -- vendor-agnostic in terms of what the best solution is for your customer. And I was just wondering, in the security area like, say, for a firewall, I mean, is the solution that you're offering better than, let's say, I don't know, Palo Alto Networks solutions right now?

Well, our solutions really are customer-dependent. We have relationships with Palo Alto and we have relationships with other security vendors, as well as Cisco and HP. And so we really are looking for the best solution for that customer in what they're trying to defend. We believe the opportunity in security is significant. We bought a company 2 years ago for Chicago that was a security company. We've added regional security architects in 5 major regions and business development managers to go after that business, and we believe that's going to be high growth. You can't pick up the newspaper today without seeing a cyber security attack by someone or some country on -- the basic industries in United States. And so I think that's going to be a big path for growth, and I think we're well positioned.

Okay. And Phil, finally, the whole question about lease versus buy decision for your customers is -- are the government agencies' budget constraints more inclined to lease now in that -- so your lease business would tend to go up at this point?

Based on past history, and we have a long history in government financing, especially federal government, I would say that, that has been the reaction by most organizations in the government space when this occurs because what happens is technology will change, they may need to redo their whole security footprint. They may not have enough budget in there to do that, so they will spread it out over time. And so I do see that being a potential for a large pickup for us in the near future.

At this time, I am showing no further questions. I would now like to turn the call back over to the presenters for closing remarks.

We'd like to thank you very much for taking the time to join our conference call. If you have any questions, please feel free to contact us. Thank you very much, and have a nice day.

Thank you.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.