And good day, ladies and gentlemen. Welcome to the ePlus earnings results conference call. [Operator Instructions] I would like to introduce your host for today's conference, Mr. Kley Parkhurst, Senior Vice President. Sir, you may begin.

Thank you for joining us today. On the call with me is Mark Marron, CEO and President; Elaine Marion, Chief Financial Officer; and Erica Stoecker, 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 this afternoon and our periodic filings with the Securities and Exchange Commission, including our Form 10-K for the year ended March 31, 2017, and our Form 10-Q for the quarter ended June 30, 2017, when filed. The company undertakes no responsibility to update any of these forward-looking statements in light of new information or future events. In addition, during the call, we may make reference to non-GAAP financial measures, and we've posted a GAAP financial reconciliation on the shareholder information section of our website at www.eplus.com. Further, reclassifications of prior period amounts related to the numbers of shares and per share amounts have been made to conform to the current period presentation due to the March 31, 2017, stock split. The effect of the stock split was recognized retroactively in the stockholders' equity and in all share data. The financial statements include the effect of the stock split on per share amounts and weighted average common shares outstanding for each of the 3-month periods ended June 30, 2017 and 2016. I'd now like to turn the call over to Mark Marron. Mark?

Thanks, Kley, and thank you for participating in today's call to discuss our first quarter 2018 results. We were very pleased with our financial and operating results for the first quarter of our 2018 fiscal year. Net sales increased 23% from the prior year's first quarter to $367 million with gains in both our technology and financing segments. The majority of this quarter's revenue growth was organic, driven by growth across our customer base, plus the continued rollout of several large competitive projects through some of our largest customers. Even normalizing for these large projects in the quarter, our growth significantly outpaced the overall market. Based on our operating model, we were able to convert sales growth into strong earnings metrics as net earnings and diluted EPS increased 25.8% and 28%, respectively, while we continued to invest to support future growth. Elaine Marion, our CFO, will discuss our financial results in detail. So I will focus on several business highlights. We continue to focus on the high-growth areas of cloud, security and digital infrastructure and the consulting and managed services that our 3,200-plus midmarket and enterprise customers are looking for in today's environment. Sales of our security products and services as a percentage of adjusted gross billings was 17.1%, up from 13.7% only 1 year ago and 16.1% for all of fiscal 2017, supporting our expectation for continued strong demand from customers and our success in meeting this need. We continue to see opportunities with today's cyber security threats. Customers are looking for ePlus to provide consultative services and assessments to help evaluate and build road maps for the future. For one customer, ePlus was asked to evaluate all industry-leading next-gen firewalls and then help select the final 2 vendors. We then helped perform an in-depth 4-week proof-of-concept for each…

Thank you, Mark, and thank you, everyone, for joining us today. We are pleased to report a strong start to fiscal 2018. We experienced double-digit growth for the first quarter for net sales, adjusted gross billings and earnings. Our strategy is to grow revenue than the overall market by focusing on high-growth solution areas such as cloud, security and digital infrastructure, while emphasizing services to provide key business outcomes for our clients. Now let me give you some color on our financial performance in the first quarter of fiscal 2018. Our net sales grew 23% to $367.2 million year-over-year. The top line increase included several large projects for major enterprise customers. We also saw increases from customers in technology, telecom and financial industries. We reported double-digit year-over-year gross profit growth. Our gross profit increased 14.7% from a year ago to $77.6 million, while our gross margin decreased 160 basis points to 21.1% year-to-year. This decline was primarily due to a shift in product mix and a large competitively bid project, which partially shipped during the quarter. Operating expenses increased 13.8% to $57.1 million, principally due to higher salaries and benefits reflecting the year-over-year headcount increase of 11.3% to 1,223 employees and higher health care costs. The higher headcount was largely due to recent acquisition. As a reminder, the acquisition of the IT equipment and services business of Consolidated Communications in December 2016 added 48 employees, and our more recent acquisition of OneCloud added 57 employees. The personnel additions include 113 sales and engineering positions. We reported operating income of $20.5 million, up 17.3% year-to-year. The higher gross profit from both the technology and financing segment contributed to the upside, as did our carefully managed expenses, which grew at a slower pace than revenue. In the first quarter of fiscal 2018,…

Thanks, Elaine. Our results in the first quarter were very strong and ePlus remains well positioned to generate revenue growth ahead of overall IT spending. We will continue to make investments to broaden our portfolio and capabilities around security, cloud, digital infrastructure and related services, which meets the business outcome requirements of our customers in today's market. Operator, I would now like to open the call for questions.

I'm on here for Matt today. Just one question from me. Looks like your tech's end markets grew almost 40% year-over-year. How much of that is related to your largest customer in that segment? And then what are the expectations for that revenue contributions as wind down as the projects are completed? And then kind of what are your expectations in terms of growth as you look to replace that?

So, John, you broke up a little bit. Are you talking about our tech segment and the growth that we saw in this quarter?

Yes, like, the end markets year-over-year. I mean, how much of that is from that largest customer? And then what are the plans to replace that growth in the future as those projects wind down?

Okay. Yes. So there is a couple different things. What we've discussed in prior quarters, John, was how we're going about covering the accounts both at a midmarket all the way to enterprise. And as we've kind of scaled our solutions to move up the stack, what we've seen is we've been brought into bigger, higher-ended market and enterprise accounts. As it relates to the quarter, what I can tell you is, even with the large deal that we had mentioned, we would still significantly outpace the IT market spending overall. It helped drive our top line by a good percentage. It actually lowered our gross margin since it was a competitive deal. The good news is that would increase our GP dollars and ultimately, we benefited on the bottom line based on expense control and everything else. So all the earnings metrics wound up the way we hoped it would. As any deal - any large deal that you deal with, there is always cycles that are involved with some of these bigger deals. So I can't predict what the future would hold as it relates to replacing that revenue.

[Operator Instructions] And our next question is from the line of Matthew Galinko with Sidoti.

I guess, just going back to M&A and how the pipeline for deals is looking and your capacity to integrate any subsequent deals from your prior?

Thanks, Matt. I'd describe it as a target-rich environment right now. I think in our industry with technology changing, there is an entrepreneurial spirit and new companies are forming and have formed over time and they sort of mature and then are ripe for consolidation. So we believe there is lots of targets, and we're looking at a lot of different deals. Our strategy is still to expand geographically by doing greenfield as well as tuck-under acquisitions in markets that we're already in, as well as execute ones that really solve a - or create opportunities for transformational and emerging technologies like OneCloud that we just did, which has turned out to be - we think, will be very good. Valuations are not reflecting in the private market, the same appreciation that's happened in the public market. So I think there is still a lot of viable accretive acquisitions that can be done. And in terms of integration operations, I think our operating platform for buying a solution provider or a VAR remains one of the strongest in the industry. Hopefully that answers your questions.

That is, that's helpful. And it kind of leads to a couple of follow-ups, if you don't mind. One would be, you did reach somewhat outside of the U.S. on a prior deal. So I'm just wondering if international continues to be any kind of focus for you in terms of subsequent M&A. And then maybe just how you think about the competitive landscape as you go into these deals? Are there typically multiple bids for the assets you're looking at? Or are you more or less alone?

Matt, it's Mark. So I'll start with your second question first. So normally there are multiple bidders or multiple players involved in the acquisitions that we look at, at least the ones we have seen in the past. As it relates to the international, you're referring to 2 things, I believe. One, we acquired IGX about 1.5 years ago. And that was our first foray into the international space. And then with the OneCloud acquisition that expanded our capabilities or our reach, if you will, into Asia-Pac for the first time. Part of the reason that we're doing, some of our bigger customers are looking for us to support them on a global or worldwide basis. So for the right opportunities, yes, we'll continue to look at what's out there and see if we can expand our footprint. But once again, it would have to be the right opportunity.

[Operator Instructions] And I'm not showing any further questions in the queue. I would like to turn the call back to management for any final remarks. End of Q&A

Okay. Thank you, operator. If I could close with just one thing. We feel good about the quarter that we delivered. We believe in our strategy in terms of how we're executing against our growth strategy. We believe we have a strong balance sheet that allows us to continue to invest in headcount as well as offerings that our customers are looking for. And we'll continue to look for the right opportunities to continue to expand both our capabilities as well as offerings. With that, I'd like to thank all of you for participating in today's conference call, and we look forward to seeing some of you at the upcoming investor conferences. Thank you, and have a good day.

Thank you.

Thank you.

And ladies and gentlemen, with that we conclude the program, and you may all disconnect. Have a wonderful day.