May 6 th , 2014
Cathy Han, Daniel Kleeman, Shalini Sivarajah

• Company Profile
• Business Model
• SWOT Analysis
• Industry Overview
• Stock Performance
• Porter’s Analysis
• Financial Analysis
• Comps Analysis
• Valuation
• Recommendation

• Nationwide provider for IT products, services and leasing options
• Founded in 1990, name changed from MLC
Holdings in 1999
• Market cap: $386.8 million
• 25+ locations
• 961 employees, 260+ engineers
• 900+ collective technical certificates
Source: ePlus Investor Presentation, March 2014

Technology Segment Financing Segment
Direct IT Sales Technology Solutions Proprietary Software
Leasing software and office equipment
Authorized reseller of IT products from
HP, Cisco, Apple,
Microsoft etc.
Data center, storage, security, cloud communication eProcurement, asset management, product content management
Hardware, software, maintenance contracts
Internet telephony, virtualization etc.
OneSource: purchasing and supplier/customer portal
Source: ePlus Inc., 10-K, June 2013
Capital assets management

Source: ePlus Investor Presentation, March 2014

• Increasing revenue from technology segment (96%)
• Growth in revenue of 19% from 2012 to 2013
• Net earnings grows 49% ($23 to $35 millions)
FY 2013 Revenue
Technology
Financing
Source: ePlus Inc., 10-K, June 2013

Vendor:
HP, Cisco (48%), EMC,
Microsoft
Verizon Communications
Facing IT solution complexity
Source: ePlus Inc., 10-K, June 2013

Strengths
• Low inventory and shipping costs
• Strong relationship with vendors and buyers
• Differentiated bundle solutions serving entire
IT lifecycle
Weaknesses
• Heavily dependent on a few key vendors
• Moderate and potentially increasing customer concentration
Opportunities Threats
• Need for cost savings may drive IT investment
• Improving technology increases potential sales
• Expansion into west coast and Midwest market
• Acquisition increases reselling capability
• Risk of vendor reducing performance-based goals
• Risk of vendor revoking authorization to sell
• Stagnating economic growth reduced business investment
• Security concerns in third-party provider
Source: ePlus Inc., 10-K, June 2013

Key Drivers
• Private Investment in Software and Corporate profit
• Copyright and patent legislation

Bargaining
Power of
Suppliers
HIGH
Threat of
New
Entrants
MEDIUM
Level of
Competition
HIGH
Bargaining
Power of
Buyers
HIGH
Threat of
Substitutes
LOW

Source: Yahoo Finance

Current Ratio
Quick Ratio
Cash Ratio
Liquidity Ratios
2009 2010 2011 2012 2013
2.00
1.25
1.48
1.60
2.15
1.91
1.19
1.42
1.46
2.04
1.06
0.52
0.53
0.25
0.39
Profitability Ratios
2009 2010 2011 2012 2013
Operating Profit Margin 4.04% 4.61% 6.00% 4.97% 6.17%
Net Margin
ROA
ROE (Book Value)
1.86% 2.33% 3.30% 2.83% 3.54%
3.53% 3.14% 6.10% 5.39% 7.95%
7.35% 6.87% 11.19% 10.64% 14.62%
Debt/Assets
Debt/Equity
Interest Coverage
Solvency Ratios
2009 2010 2011 2012 2013
23.38% 13.23% 7.60% 6.47% 9.53%
48.76% 28.94% 13.96% 12.77% 17.52%
4.80
6.10
16.82
28.67
32.45
2009
A/R Turnover 8.34
Days Sales Outstanding 43.74
Fixed Asset Turnover 5.63
Total Asset Turnover
Activity Ratios
1.90
2010
5.03
72.56
3.52
1.35
2011 2012 2013
5.90
4.73
5.11
61.87
77.19
71.38
6.01
6.99
10.58
1.85
1.90
2.25
DuPont Analysis
2009 2010 2011 2012 2013
Tax Burden
Interest Burden
58.19%
79.15%
Operating Profit Margin 4.04%
60.45%
83.60%
4.61%
58.49% 59.05%
94.06% 96.51%
6.00% 4.97%
59.29%
96.92%
6.17%
Asset Turnover 1.90
1.35
1.85
1.90
2.25
Leverage
ROE
2.09
7.35%
2.19
1.84
1.97
1.84
6.87% 11.19% 10.64% 14.62%
EBIT/Tangible Assets
EBIT/EV
2009
Greenblatt
2010 2011 2012 2013
18.80% 15.99% 26.24% 22.01% 30.77%
18.49% 13.74% 15.85% 13.31% 13.43%

Ticker Company Name
CTG Computer Task Group Inc.
BBOX Black Box Corporation
NCIT NCI, Inc.
PCCC PC Connection, Inc.
Mean
Median
PLUS ePlus inc.
Price ($) Market Cap ($mm)
Net Debt
($mm)
Enterprise
Value
15.51
20.62
10.27
20.33
16.79
18.06
285.3
323.1
133.0
532.8
318.6
304.1
(46.2)
163.4
1.0
(42.5)
18.9
(20.8)
239.1
486.5
134.0
490.2
337.5
362.7
51.18
485.6
54.3 535.0

Multiple
P/E
EV/Revenue
EV/EBITDA
P/B
Multiple
P/E
EV/Revenue
EV/EBITDA
P/B
Implied Price per Share
Multiple
Value
16.1x
0.4x
7.1x
2.1x
ePlus Value
34.83
983.1
74.5
238.2
Equity
Value
$69.81
$47.87
$59.35
$62.02
Weight
25%
25%
25%
25%
100%
Enterprise
Value
-
$437.84
$529.85
-
Equity Value
$69.81
$47.87
$59.35
$62.02
Implied
Share
Price
$17.45
$11.97
$14.84
$15.51
$59.76

Weighted Average Cost of Capital
Share Price
Fully Diluted Shares Outstanding
Market Value of Equity
$ 51.18
8,013
410,105
Total Debt 41,739
Weight of Equity
Weight of Debt
Cost of Debt
Size weighted interest rate
CAPM Cost of Equity
PLUS Realized Return
Cost of Equity
Tax Rate
WACC
90.76%
9.24%
4.48%
9.05% 80.00%
26.42% 20.00%
12.52%
40.00%
11.61%
CAPM
Risk-Free Rate
Market Risk Premium
5-Year Beta
CAPM Cost of Equity
3.50%
6.00%
0.92
9.05%
Discount Rate
WACC 11.61%
Business Risk Premium 2.00%
Discount Rate 13.61%
Annual Realized Return
Year Return
3
4
1
2
5
22.38%
50.17%
19.60%
58.22%
2.05%
Total Realized Return
Arithmetic Return
Geometric Return
322.92%
30.48%
26.42%

EBIT
Less: Taxes
Plus: Depreciation
Less: Capital Expenditures
Changes in Net Working Capital
Less: Increases in A/R
Less: Increases in Inventory
Plus: Increases in A/P
Free Cash Flow
Present Value
% of Value
Discount Rate
Terminal Growth Rate
Enterprise Value
Less: Debt
Market Capitalization
Share Price ePlus Discounted Cash Flow Analysis
2014 2015 2016
68,381
(25,880)
15,780
(15,780)
93,714
(34,987)
18,743
(9,996)
79,015
(29,041)
12,827
(25,654)
2017
110,451
(41,235)
22,090
(18,409)
2018
115,913
(43,274)
23,183
(23,183)
Terminal
(7,629)
4,275
12,761
51,908
45,688
10%
(50,021)
(8,223)
40,468
49,699
38,502
9%
(32,294)
(6,912)
(15,091)
(17,149)
(11,693)
-3%
(41,792)
(3,799)
(1,194)
26,112
15,672
4%
(16,020)
(1,456)
6,918
62,080
32,793
7%
602,416
318,223
72%
13.61%
3.00%
439,184
(41,739)
397,445
$ 49.60
#### 2.0%
12.7% $ 50.57
13.2% $ 47.75
13.7% $ 45.18
14.2% $ 42.83
14.7% $ 40.68
Sensitivity Analysis
2.5%
$ 52.74
$ 49.70
$ 46.93
$ 44.42
$ 42.11
3.0%
$ 55.15
$ 51.84
$ 48.85
$ 46.14
$ 43.66
3.5%
$ 57.81
$ 54.20
$ 50.95
$ 48.02
$ 45.36
4.0%
$ 60.77
$ 56.81
$ 53.27
$ 50.09
$ 47.21
Benjamin Graham ePlus
Median of Comparables
Growth
2.65%
3.78%

• Goodwill reclassification
• Variability of operating cash flow
• Expansion of trade receivables

• Watch list
• Market Price at Monday close - $51.18
Method
DCF
Comparables
Combined
Value
$ 49.60
$ 59.76
Weight Share Price
70%
30%
100%
$
$
$
34.72
17.93
52.65