PC Connection (CNXN) 10-K 3 Mar 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 27, 2017	Jun. 30, 2016
Document And Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	FY
Trading Symbol	PCCC
Entity Registrant Name	PC CONNECTION INC
Entity Central Index Key	1,050,377
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		26,719,185
Entity Public Float			$ 265,826,436

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 49,180	$ 80,188
Accounts receivable, net	411,883	356,145
Inventories	90,535	102,780
Income taxes receivable	2,120	1,575
Prepaid expenses and other current assets	5,453	4,254
Deferred income taxes		7,909
Total current assets	559,171	552,851
Property and equipment, net	39,402	32,227
Goodwill	73,602	51,276
Other intangibles, net	12,586	1,668
Other assets	1,373	1,052
Total Assets	686,134	639,074
Current Liabilities:
Accounts payable	177,862	166,516
Accrued expenses and other liabilities	31,047	36,207
Accrued payroll	21,345	19,280
Total current liabilities	230,254	222,003
Deferred income taxes	19,602	21,615
Other liabilities	2,836	3,005
Total Liabilities	252,692	246,623
Commitments and Contingencies (Note 11)
Stockholders' Equity:
Preferred Stock, $.01 par value, 10,000 shares authorized, none issued
Common Stock, $.01 par value, 100,000 shares authorized, 28,465 and 28,353 issued, 26,609 and 26,498 outstanding at December 31, 2016 and 2015, respectively	285	284
Additional paid-in capital	111,081	109,161
Retained earnings	337,938	298,868
Treasury stock, at cost, 1,856 shares at December 31, 2016 and 2015	(15,862)	(15,862)
Total Stockholders' Equity	433,442	392,451
Total Liabilities and Stockholders' Equity	$ 686,134	$ 639,074

CONSOLIDATED BALANCE SHEETS (PA

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares shares in Thousands	Dec. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred Stock, par value	$ 0.01	$ 0.01
Preferred Stock, shares authorized	10,000	10,000
Preferred Stock, shares issued	0	0
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, shares authorized	100,000	100,000
Common Stock, shares issued	28,465	28,353
Common Stock, shares outstanding	26,609	26,498
Treasury stock, shares	1,856	1,856

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Consolidated Statements of Income
Net sales	$ 735,548	$ 708,485	$ 676,165	$ 572,394	$ 684,323	$ 680,769	$ 627,622	$ 581,259	$ 2,692,592	$ 2,573,973	$ 2,463,339
Cost of sales	637,425	611,518	582,291	490,201	592,472	592,201	544,635	503,646	2,321,435	2,232,954	2,139,950
Gross profit	98,123	96,967	93,874	82,193	91,851	88,568	82,987	77,613	371,157	341,019	323,389
Selling, general and administrative expenses	76,222	74,522	72,864	67,029	68,960	66,707	63,364	63,434	290,637	262,465	251,935
Income from operations	21,901	22,445	21,010	15,164	22,891	21,861	19,623	14,179	80,520	78,554	71,454
Interest expense	(14)	(27)	(12)	(14)	(20)	(29)	(39)	1	(67)	(87)	(86)
Income before taxes	21,887	22,418	20,998	15,150	22,871	21,832	19,584	14,180	80,453	78,467	71,368
Income tax provision	(8,890)	(8,825)	(8,540)	(6,087)	(9,258)	(8,831)	(7,955)	(5,596)	(32,342)	(31,640)	(28,687)
Net income	$ 12,997	$ 13,593	$ 12,458	$ 9,063	$ 13,613	$ 13,001	$ 11,629	$ 8,584	$ 48,111	$ 46,827	$ 42,681
Earnings per common share:
Basic	$ 0.49	$ 0.51	$ 0.47	$ 0.34	$ 0.51	$ 0.49	$ 0.44	$ 0.33	$ 1.81	$ 1.77	$ 1.63
Diluted	$ 0.49	$ 0.51	$ 0.47	$ 0.34	$ 0.51	$ 0.49	$ 0.44	$ 0.32	$ 1.80	$ 1.76	$ 1.61
Shares used in computation of earnings per common share:
Basic	26,569	26,542	26,501	26,499	26,459	26,423	26,363	26,346	26,528	26,398	26,246
Diluted	26,738	26,736	26,691	26,671	26,632	26,622	26,616	26,593	26,719	26,616	26,512

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Shares	Total
Balance at Dec. 31, 2013	$ 281	$ 104,932	$ 230,478	$ (15,862)	$ 319,829
Balance (in shares) at Dec. 31, 2013	28,056			(1,856)
Issuance of common stock under stock incentive plans		356			356
Issuance of common stock under stock incentive plans (in shares)	49
Issuance of common stock under Employee Stock Purchase Plan		753			753
Issuance of common stock under Employee Stock Purchase Plan (in shares)	35
Stock-based compensation expense		929			929
Nonvested stock awards	$ 1	(1)
Nonvested stock awards (in shares)	59
Shares withheld for taxes paid on stock awards		(578)			(578)
Tax benefit from stock-based compensation		565			565
Dividend payment			(10,527)		(10,527)
Net income			42,681		42,681
Balance at Dec. 31, 2014	$ 282	106,956	262,632	$ (15,862)	354,008
Balance (in shares) at Dec. 31, 2014	28,199			(1,856)
Issuance of common stock under stock incentive plans	$ 1	436			437
Issuance of common stock under stock incentive plans (in shares)	41
Issuance of common stock under Employee Stock Purchase Plan		875			875
Issuance of common stock under Employee Stock Purchase Plan (in shares)	39
Stock-based compensation expense		994			994
Nonvested stock awards	$ 1	(1)
Nonvested stock awards (in shares)	74
Shares withheld for taxes paid on stock awards		(660)			(660)
Tax benefit from stock-based compensation		561			561
Dividend payment			(10,591)		(10,591)
Net income			46,827		46,827
Balance at Dec. 31, 2015	$ 284	109,161	298,868	$ (15,862)	$ 392,451
Balance (in shares) at Dec. 31, 2015	28,353			(1,856)	28,353
Issuance of common stock under stock incentive plans		135			$ 135
Issuance of common stock under stock incentive plans (in shares)	11
Issuance of common stock under Employee Stock Purchase Plan		961			961
Issuance of common stock under Employee Stock Purchase Plan (in shares)	39
Stock-based compensation expense		1,049			1,049
Nonvested stock awards	$ 1	(1)
Nonvested stock awards (in shares)	62
Shares withheld for taxes paid on stock awards		(737)			(737)
Tax benefit from stock-based compensation		513			513
Dividend payment			(9,041)		(9,041)
Net income			48,111		48,111
Balance at Dec. 31, 2016	$ 285	$ 111,081	$ 337,938	$ (15,862)	$ 433,442
Balance (in shares) at Dec. 31, 2016	28,465			(1,856)	28,465

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)
Cash Flows from Operating Activities:
Net income	$ 48,111	$ 46,827	$ 42,681
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,453	8,961	8,092
Stock-based compensation expense	1,049	994	929
Provision for doubtful accounts	360	1,097	1,383
Deferred income taxes	3,506	2,652	1,212
Loss on disposal of fixed assets	92	44	14
Excess tax benefit from exercise of equity awards	(513)	(552)	(556)
Changes in assets and liabilities:
Accounts receivable	(33,835)	(64,215)	(11,359)
Inventories	12,401	(11,863)	(11,776)
Prepaid expenses and other current assets	(1,274)	(285)	1,829
Other non-current assets	(321)	(328)	(4)
Accounts payable	(3,012)	41,324	202
Accrued expenses and other liabilities	(3,431)	6,206	2,751
Net cash provided by operating activities	33,586	30,862	35,398
Cash Flows from Investing Activities:
Cash paid for Acquisitions	(42,990)
Purchases of property and equipment	(11,885)	(12,337)	(7,609)
Purchase of intangible asset		(450)
Proceeds from sale of equipment			13
Net cash used for investing activities	(54,875)	(12,787)	(7,596)
Cash Flows from Financing Activities:
Dividend payment	(10,591)		(10,527)
Issuance of stock under Employee Stock Purchase Plan	961	875	753
Excess tax benefit from exercise of equity awards	513	552	556
Exercise of stock options	135	437	356
Payment of payroll taxes on stock-based compensation through shares withheld	(737)	(660)	(578)
Net cash (used for) provided by financing activities	(9,719)	1,204	(9,440)
(Decrease) increase in cash and cash equivalents	(31,008)	19,279	18,362
Cash and cash equivalents, beginning of year	80,188	60,909	42,547
Cash and cash equivalents, end of year	49,180	80,188	60,909
Non-cash Investing and Financing Activities:
Accrued capital expenditures	109	504	205
Dividend declaration	9,041	10,591
Supplemental Cash Flow Information:
Income taxes paid	$ 29,740	$ 30,371	$ 24,219

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2016
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	PC CONNECTION, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share data) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES We are a national solutions provider of a wide range of information technology (“IT”) solutions. We help our customers design, enable, manage, and service their IT environments. We provide IT products, including computer systems, software and peripheral equipment, networking communications, and other products and accessories that we purchase from manufacturers, distributors, and other suppliers. We also offer services involving design, configuration, and implementation of IT solutions. These services are performed by our personnel and by third-party providers. We operate through three sales segments, which serve primarily: (a) small- to medium-sized businesses, in our SMB segment, through our PC Connection Sales subsidiary, (b) large enterprise customers, in our Large Account segment, through our MoreDirect subsidiary, and (c) federal, state, and local government and educational institutions, in our Public Sector segment, through our GovConnection subsidiary. The following is a summary of our significant accounting policies: Principles of Consolidation The consolidated financial statements include the accounts of PC Connection, Inc. and its subsidiaries, all of which are wholly-owned. Intercompany transactions and balances are eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period. By nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates and assumptions. Revenue Recognition Revenue on product sales is recognized at the point in time when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred, and there is a reasonable assurance of collection of the sales proceeds. We generally obtain oral or written purchase authorizations from our customers for a specified amount of product at a specified price. Because we either (i) have a general practice of covering customer losses while products are in-transit despite title transferring at the point of shipment or (ii) have FOB–destination shipping terms specifically set out in our arrangements with federal agencies and certain commercial customers, delivery is deemed to have occurred at the point in time when the product is received by the customer. We provide our customers with a limited thirty-day right of return generally limited to defective merchandise. Revenue is recognized at delivery and a reserve for sales returns is recorded. We make reasonable and reliable estimates of product returns based on significant historical experience and record our sales reserves as a reduction of revenues and either as offsets to accounts receivable or, for customers who have already paid, as offsets to accrued expenses. At December 31, 2016, we recorded sales reserves of $3,709 and $220 as components of accounts receivable and accrued expenses, respectively. At December 31, 2015, we recorded sales reserves of $3,235 and $178 as components of accounts receivable and accrued expenses, respectively. All amounts billed to a customer in a sales transaction related to shipping and handling, if any, represent revenues earned for the goods provided, and these amounts have been classified as “net sales.” Costs related to such shipping and handling billings are classified as “cost of sales.” Sales are reported net of sales, use, or other transaction taxes that are collected from customers and remitted to taxing authorities. We use our own engineering personnel in projects involving the design and installation of systems and networks, and we also engage third-party service providers to perform warranty maintenance, implementations, asset disposals, and other services. This service revenue represents a small percentage of our consolidated revenue. We evaluate such engagements to determine whether we or the third party assumes the general risk and reward of ownership in these transactions. For those transactions in which we do not assume the risk and reward but instead act as an agent, we recognize the transaction revenue on a net basis. Under net sales recognition, the cost of the third party is recorded as a reduction to the selling price, resulting in net sales being equal to the gross profit on the transaction. In those engagements in which we are the principal and primary obligor, we report the sale on a gross basis, and the cost of the service provider is recognized in cost of goods sold. Similarly, we recognize revenue from agency sales transactions on a net sales basis. In agency sales transactions, we facilitate product sales by equipment and software manufacturers directly to our customers and receive agency, or referral, fees for such transactions. We do not take title to the products or assume any maintenance or return obligations in these transactions; title is passed directly from the supplier to our customer. Amounts recognized on a net basis included in net sales for such third-party services and agency sales transactions were $30,234, $24,158, and $25,696 for the years ended December 31, 2016, 2015, and 2014, respectively. In certain revenue arrangements, our contracts require that we provide multiple units of hardware, software, or services deliverables. Under these multiple-element arrangements, each service performed and product delivered is considered a separate deliverable and qualifies as a separate unit of accounting. For material multiple element arrangements, we allocate revenue based on vendor-specific objective evidence of fair value of the underlying services and products. If we were to enter into a multiple element arrangement in which vendor-specific objective evidence was not available, we would utilize third-party evidence to allocate the selling price. If neither vendor-specific objective evidence nor third-party evidence was available, we would estimate the selling price based on market price and company specific factors. Cost of Sales and Certain Other Costs Cost of sales includes the invoice cost of the product, direct employee and third party cost of services, direct costs of packaging, inbound and outbound freight, and provisions for inventory obsolescence, adjusted for discounts, rebates, and other vendor allowances. Cash and Cash Equivalents We consider all highly liquid short-term investments with original maturities of 90 days or less to be cash equivalents. The carrying value of our cash equivalents approximates fair value. The majority of payments due from credit card processors and banks for third-party credit card and debit card transactions process within one to five business days. All credit card and debit card transactions that process in less than seven days are classified as cash and cash equivalents. Amounts due from banks for credit card transactions classified as cash equivalents totaled $4,345 and $6,786 at December 31, 2016 and 2015, respectively. Accounts Receivable We perform ongoing credit evaluations of our customers and adjust credit limits based on payment history and customer creditworthiness. We maintain an allowance for estimated doubtful accounts based on our historical experience and the customer credit issues identified. Our customers do not post collateral for open accounts receivable. We monitor collections regularly and adjust the allowance for doubtful accounts as necessary to recognize any changes in credit exposure. Trade receivables are written off in the period in which they are deemed uncollectible. Recoveries of trade receivables previously charged are recorded when received. Inventories Inventories (all finished goods) consisting of software packages, computer systems, and peripheral equipment, are stated at cost (determined under a weighted-average cost method which approximates the first-in, first-out method) or market, whichever is lower. Inventory quantities on hand are reviewed regularly, and allowances are maintained for obsolete, slow moving, and nonsalable inventory. Vendor Consideration We receive funding from merchandise vendors for price protections, discounts, product rebates, and other programs. These allowances are treated as a reduction of the vendor’s prices and are recorded as adjustments to cost of sales or inventory, as applicable. Allowances for product rebates that require certain volumes of product sales or purchases are recorded as the related milestones are probable of being met. Advertising Costs and Vendor Consideration Costs of producing and distributing catalogs are charged to expense in the period in which the catalogs are first circulated. Other advertising costs are expensed as incurred. Vendors have the ability to place advertisements in our catalogs or fund other advertising activities for which we receive advertising consideration. This vendor consideration, to the extent that it represents specific reimbursements of incremental and identifiable costs, is offset against SG&A expenses. Advertising consideration that cannot be associated with a specific program or that exceeds the fair value of advertising expense associated with that program is classified as an offset to cost of sales. Our vendor partners generally consolidate their funding of advertising and other marketing programs, and accordingly, we classify substantially all vendor consideration as a reduction of cost of sales rather than a reduction of advertising expense. Advertising expense, which is classified as a component of SG&A expenses, totaled $16,083, $15,689, and $15,767, for the years ended December 31, 2016, 2015, and 2014, respectively. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is provided for financial reporting purposes over the estimated useful lives of the assets ranging from three to seven years. Computer software, including licenses and internally developed software, is capitalized and amortized over lives ranging from three to seven years. Depreciation is recorded using the straight-line method. Leasehold improvements and facilities under capital leases are amortized over the terms of the related leases or their useful lives, whichever is shorter, whereas for income tax reporting purposes, they are amortized over the applicable tax lives. Costs incurred to develop internal-use software during the application development stage are recorded in property and equipment at cost. External direct costs of materials and services consumed in developing or obtaining internal-use computer software and payroll-related costs for employees developing internal-use computer software projects, to the extent of their time spent directly on the project and specific to application development, are capitalized. When events or circumstances indicate a potential impairment, we evaluate the carrying value of property and equipment based upon current and anticipated undiscounted cash flows. We recognize impairment when it is probable that such estimated future cash flows will be less than the asset carrying value. Goodwill and Other Intangible Assets Our intangible assets consist of (1) goodwill, which is not subject to amortization; (2) an internet domain name, which is an indefinite-lived intangible not subject to amortization; and (3) amortizing intangibles, which consist of customer lists, trade names, and certain technology licensing agreements, which are being amortized over their useful lives. Note 3 describes the annual impairment methodology that we employ on January 1 st of each year in calculating the recoverability of goodwill and non-amortizing intangibles. This same impairment test is performed at other times during the course of a year should an event occur or circumstance change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Recoverability of amortizing intangible assets is assessed only when events have occurred that may give rise to impairment. When a potential impairment has been identified, forecasted undiscounted net cash flows of the operations to which the asset relates are compared to the current carrying value of the long-lived assets present in that operation. If such cash flows are less than such carrying amounts, long-lived assets including such intangibles, are written down to their respective fair values. Concentrations Concentrations of credit risk with respect to trade account receivables are limited due to the large number of customers comprising our customer base. No single customer accounted for more than 2% of total net sales in 2016, 2015, and 2014. While no single agency of the federal government comprised more than 2% of total sales, aggregate sales to the federal government as a percentage of total net sales were 7.5%, 6.7%, and 6.5% in 2016, 2015, and 2014, respectively. Product purchases from Ingram Micro, Inc. (“Ingram”), our largest supplier, accounted for approximately 21% of our total product purchases in 2016 and 2015, respectively, and 25% in 2014. Purchases from Synnex Corporation (“Synnex”) comprised 13%, 15%, and 13% of our total product purchases in 2016, 2015, and 2014, respectively. No other vendor supplied more than 10% of our total product purchases in 2016, 2015, or 2014. We believe that, while we may experience some short-term disruption, alternative sources for products obtained directly from Ingram and Synnex are available to us. Products manufactured by HP represented 20% of our net sales in 2016 and 22% in both 2015 and 2014. We believe that in the event we experience either a short-term or permanent disruption of supply of HP products, such disruption would likely have a material adverse effect on our results of operations and cash flows. Earnings Per Share Basic earnings per common share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to nonvested stock units and stock options outstanding, if dilutive. The following table sets forth the computation of basic and diluted earnings per share: 2016 2015 2014 Numerator: Net income $ $ $ Denominator: Denominator for basic earnings per share Dilutive effect of employee stock awards Denominator for diluted earnings per share Earnings per share: Basic $ $ $ Diluted $ $ $ For the years ended December 31, 2016, 2015, and 2014, the following outstanding nonvested stock units and stock options were excluded from the computation of diluted earnings per share because including them would have had an anti-dilutive effect: 2016 2015 2014 Employee stock awards — — 98 Comprehensive Income We had no items of comprehensive income, other than our net income for each of the periods presented. Recently Issued Financial Accounting Standards On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which amends the existing accounting standards for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the mandatory effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, the Company may adopt the standard in either its first quarter of 2017 or 2018. An entity may choose to adopt the new standard either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the new standard. We are in the process of determining the effect that the adoption will have on our consolidated financial statements. Based on our analysis to date, we have reached the following tentative conclusions regarding the new standard and how we expect it to affect our consolidated financial statements and related disclosures: · We expect to adopt the standard in the first quarter of 2018 and will not early adopt. · We expect to use the full restrospective method. Such method provides that upon applying the new standard, prior periods will be retrospectively adjusted and the cumulative effect of the change recognized in the opening retained earnings as of January 1, 2016. · We believe that since substantially all of our revenue is contractual, substantially all of our revenue falls within the scope of ASU No. 2014-09, as amended. · As discussed above, our hardware and software revenue is generally recognized on a gross basis upon delivery. Upon adoption of the new standard, we do not expect this to change. However, we are continuing to analyze each of our material revenue streams to determine any changes that may be required under the new standard. · As discussed above, we hold inventories not available for sale related to certain product sales transactions in which we are warehousing the product and will be deploying the product to our clients’ designated locations subsequent to period-end. We are currently still evaluating the effect of the new standard on our inventories not available for sale to identify the differing performance conditions within the underlying contracts and to determine if a portion of revenue under the contracts should be recognized at an earlier point in time than we are recognizing under current accounting standards. · 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. Our analysis and evaluation of the new standard will continue through its effective date in the first quarter of 2018. A substantial amount of work remains to be completed due to the complexity of the new standard, the application of judgment, and the requirement for the use of estimates in applying the new standard, as well as the volume of our client portfolio and the related terms and conditions of our contracts that must be reviewed. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory , which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. This standard is effective for the Company prospectively beginning January 1, 2017, with early adoption permitted. We do not expect the adoption of ASU 2015-11 to have a material impact on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes , to simplify the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and deferred tax assets are required to be classified as non-current on the consolidated balance sheet. ASU 2015-17 will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016 with early adoption permitted. The Company elected to early adopt ASU 2015-17 on January 1, 2016, prospectively, as permitted, and reclassified $7,909 of current deferred tax assets to non-current liabilities upon adoption of the standard. The prior reporting period was not retroactively adjusted. The adoption of the guidance had no impact on the Company’s condensed consolidated statements of income and comprehensive income. In February 2016, the FASB issued ASU 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation–Stock Compensation (Topic 718) . The new standard simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under this guidance, a company recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the additional paid-in capital pool and reduces the complexity in accounting for excess tax benefits and tax deficiencies. The new standard is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods, however, early adoption is allowed. We do not expect the adoption of ASU 2016-09 to have a material impact on our consolidated financial statements In January 2017, the FASB issued ASU 2017-04, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity's testing of reporting units for goodwill impairment and clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for us beginning January 1, 2020 for both interim and annual reporting periods. We are currently assessing the potential impact of the adoption of ASC 2017-04 on our consolidated financial statements.

ACQUISITIONS

ACQUISITIONS	12 Months Ended
	Dec. 31, 2016
Acquisitions
Acquisitions	2. ACQUISITIONS Softmart Acquisition On May 27, 2016, we acquired substantially all of the assets of Softmart Inc. (“Softmart”), a global supplier of information technology and software services solutions. The purchase of Softmart is consistent with our strategy to expand our software services capabilities. Under the terms of the asset purchase agreement, we paid $31,889, net of cash acquired, and allocated the total purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The excess of the purchase price over the net assets acquired represents potential synergies from Softmart’s customer base and its assembled workforce of sales representatives and software service specialists that we acquired in the transaction. This excess of purchase price over the aggregate fair values was recorded as goodwill. We incurred $357 of transaction costs in 2016 related to the acquisition which we have reported in selling, general and administrative expenses in our consolidated statement of income for the year ended December 31, 2016. The operating results of Softmart have been included in the SMB and Large Accounts segments since the acquisition date. Softmart’s revenues and income from operations were not material to our consolidated results, and accordingly, we have not presented Softmart’s revenues or operating results on a pro forma basis. The following table reflects components of the net assets acquired and liabilities assumed at fair value as of the closing date. Purchase Price Allocation Current assets $ Fixed assets Goodwill Customer relationships Total assets acquired Acquired liabilities Net assets acquired Less cash acquired Purchase price at closing, net of cash acquired $ We recorded goodwill of $7,366 and $6,948 in our SMB and Large Account segments, respectively, and the aggregate is expected to be fully deductible for tax purposes. GlobalServe Acquisition On October 11, 2016, we acquired the outstanding common shares of GlobalServe, Inc. (“GlobalServe”), which has developed an internet portal tool that simplifies customers’ global IT procurement. Under the terms of the stock purchase agreement, we paid $11,101, net of cash acquired. The purchase of GlobalServe allows us to service our customers’ global IT needs through their OneSource internet portal with consistent delivery, reporting, pricing, and logistics. We allocated the total purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition and recorded the excess of purchase price over the aggregate fair values as goodwill. The initial allocation of the purchase price was based upon a preliminary valuation, and accordingly, our estimates and assumptions are subject to change as we obtain additional information during the measurement period and completion of the valuation of intangible assets. Measurement period adjustments reflect new information obtained about facts and circumstances that existed as of the acquisition date. We believe that such preliminary allocations provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but we are waiting for additional information necessary to finalize fair value. We expect to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. Final determination of the fair value may result in further adjustments to the values presented below. We incurred $118 of transaction costs in 2016 related to the acquisition which we have reported in selling, general and administrative expenses in our consolidated statement of income for the year ended December 31, 2016. We have included the operating results of GlobalServe in the Large Account segment since the acquisition date. GlobalServe’s revenues and income from operations were not material to our consolidated results, and accordingly, we have not presented GlobalServe’s revenues or operating results on a pro forma basis. The following table reflects components of the net assets acquired and liabilities assumed at fair value as of the closing date. The fair values of the intangibles were determined through a third-party valuation using management estimates, which have not been finalized. Purchase Price Allocation Current assets $ Fixed assets Goodwill Customer relationships Total assets acquired Acquired liabilities Deferred taxes, unrecognized tax benefits Net assets acquired Less cash acquired Purchase price at closing, net of cash acquired $ We recorded $8,012 of goodwill as a result of our acquisition of GlobalServe in our Large Account segment. None of the goodwill related to this acquisition will be deductible for tax purposes.

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure
Goodwill and Other Intangible Assets	3. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill and intangible assets with indefinite lives are subject to an annual impairment test and tested more frequently if events or circumstances occur that would indicate a potential decline in fair value. For goodwill, a two-step quantitative test is performed at a reporting unit level which requires, under the first step, that the fair value of a reporting unit is determined and compared to the reporting unit’s carrying value, including goodwill. To assess the fair value of a reporting unit, both income and market valuation approaches are used. If the fair value is determined to be less than the carrying value, the second step is performed to measure the amount, if any, of the impairment. Our annual impairment test of an indefinite-lived domain name and goodwill is set as of the first day of the year. Goodwill is held by our Large Account and SMB reporting units. The fair value of the domain name and the Large Account and SMB reporting units each substantially exceeded the respective carrying value, and accordingly, an impairment was not identified in the annual test. We also did not identify any events or circumstances that would indicate that it is more likely than not that the carrying values of the reporting unit or the domain name were in excess of the respective fair values during the year ended December 31, 2016. To determine the fair value of our reporting units, we considered operating results and future projections, as well as changes in the Company’s overall market capitalization. The significant assumptions used in our discounted cash flow analysis include: projected cash flows and profitability, the discount rate used to present value future cash flows, working capital requirements, and terminal growth rates. Cash flows and profitability assumptions include sales growth, gross margin, and SG&A growth assumptions which are generally based on historical trends. The discount rate used is a "market participant" weighted average cost of capital ("WACC"). For our computation of fair value as of January 1, 2016, we used a WACC rate of 10.9%, and estimated terminal growth rate at 5.0% and working capital requirements at 7.5% of revenues. The carrying amount of goodwill for the periods presented is detailed below: Balance at December 31, 2015 SMB Large Account Public Sector Total Goodwill, gross $ $ $ $ Accumulated impairment losses ─ Net balance $ — $ $ — $ Balance at December 31, 2016 SMB Large Account Public Sector Total Goodwill, gross $ $ $ $ Accumulated impairment losses ─ Net balance $ $ $ — $ Intangible Assets At December 31, 2016, our intangible assets included a domain name for $450, which has an indefinite life and is not subject to amortization. In addition, we acquired in 2016 customer relationships from our Softmart and GlobalServe acquisitions, which will be amortized on a straight-line basis over their estimated useful lives of 10 years. Our remaining intangible assets are amortized in proportion to the estimates of the future cash flows underlying the valuation of the assets. Intangible assets and related accumulated amortization are detailed below: December 31, 2016 December 31, 2015 Estimated Gross Accumulated Net Gross Accumulated Net Useful Lives Amount Amortization Amount Amount Amortization Amount Customer List 8 $ $ $ $ $ $ Tradename 5 Customer Relationships 10 — — — Total Intangible Assets $ $ $ $ $ $ In 2016, 2015, and 2014, we recorded amortization expense of $1,281, $735, and $901, respectively. The estimated amortization expense relating to intangible assets in each of the five succeeding years and thereafter is as follows: For the Years Ended December 31, 2017 $ 2018 2019 2020 2021 2022 and thereafter $

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	12 Months Ended
	Dec. 31, 2016
Accounts Receivable
Accounts Receivable	4. ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: December 31, 2016 2015 Trade $ $ Vendor returns, consideration and other Due from employees Due from affiliates — Total Gross Accounts Receivable Allowances for: Sales returns Doubtful accounts Accounts Receivable, net $ $

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2016
Property and Equipment
Property and Equipment	5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: December 31, 2016 2015 Computer software, including licenses and internally-developed software $ $ Furniture and equipment Leasehold improvements Total Accumulated depreciation and amortization Property and equipment, net $ $ We recorded depreciation and amortization expense for property and equipment of $9,172, $8,226, and $7,191 in 2016, 2015, and 2014, respectively.

BANK BORROWINGS

BANK BORROWINGS	12 Months Ended
	Dec. 31, 2016
Bank Borrowings
Bank Borrowings	6. BANK BORROWINGS We have a $50,000 credit facility collateralized by our receivables that expires February 10, 2022. This facility can be increased, at our option, to $80,000 for approved acquisitions or other uses authorized by the lender on substantially the same terms. Amounts outstanding under this facility bear interest at the one-month London Interbank Offered Rate (“LIBOR”), plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate (3.75% at December 31, 2016). The one-month LIBOR rate at December 31, 2016 was 0.77%. The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions. Funded debt ratio is the ratio of average outstanding advances under the credit facility to Adjusted EBITDA (Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges). The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0. Decreases in our consolidated Adjusted EBITDA could limit our potential borrowings under the credit facility. We had no outstanding bank borrowings in 2016 or 2015, and accordingly, the entire $50,000 facility was available for borrowings under the credit facility. In February of 2017, we renewed our credit facility, extending the expiration date to February 10, 2022, at which time any amounts outstanding become due. The credit facility was renewed with substantially the same terms and conditions as with the preceding agreement.

TRADE CREDIT AGREEMENTS

TRADE CREDIT AGREEMENTS	12 Months Ended
	Dec. 31, 2016
Trade Credit Agreements
Trade Credit Agreements	7. TRADE CREDIT AGREEMENTS At December 31, 2016 and 2015, we had security agreements with two financial institutions to facilitate the purchase of inventory from various suppliers under certain terms and conditions. The agreements allow a collateralized first position in certain branded products in our inventory financed by the financial institutions up to an aggregated amount of $65,000. The cost of such financing under these agreements is borne by the suppliers by discounting their invoices to the financial institutions. We do not pay any interest or discount fees on such inventory. At December 31, 2016 and 2015, accounts payable included $33,061 and $23,044, respectively, owed to these financial institutions.

STOCKHOLDERS' EQUITY AND SHARE-

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2016
Stockholders' Equity and Share-Based Compensation
Stockholders' Equity and Share-Based Compensation	8. STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION Preferred Stock Our Amended and Restated Certificate of Incorporation (the “Restated Certificate”) authorizes the issuance of up to 10,000 shares of preferred stock, $.01 par value per share (the “Preferred Stock”). Under the terms of the Restated Certificate, the Board is authorized, subject to any limitations prescribed by law, without stockholder approval, to issue by a unanimous vote such shares of Preferred Stock in one or more series. Each such series of Preferred Stock shall have such rights, preferences, privileges, and restrictions, including voting rights, dividend rights, redemption privileges, and liquidation preferences, as shall be determined by the Board. There were no preferred shares outstanding at December 31, 2016 or 2015. Share Repurchase Authorization In 2001, our Board of Directors authorized the spending of up to $15,000 to repurchase our common stock. We consider block repurchases directly from larger stockholders, as well as open market purchases, in carrying out our ongoing stock repurchase program. We did not repurchase any shares in the three years ended December 31, 2016. As of December 31, 2016, we have repurchased an aggregate of 1,682 shares for $12,233 under our repurchase program, and the maximum approximate dollar value of shares that may yet be purchased under this program is $2,767. In 2014, our Board of Directors approved a new share repurchase program authorizing up to $15,000 in share repurchases. There is no fixed termination date for this new repurchase program. Purchases may be made in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions. We intend to complete the 2001 repurchase program before repurchasing shares under the new program. The timing and amount of any share repurchases will be based on market conditions and other factors. Dividend Payments The following table summarizes our special cash dividends declared in the three years ended December 31, 2016: 2016 2015 2014 Dividend per share $ 0.34 $ 0.40 $ 0.40 Stockholder record date 12/30/2016 12/29/2015 12/01/2014 Total dividend $ 9,041 $ 10,591 $ 10,527 Payment date 1/12/2017 1/12/2016 12/15/2014 The dividends paid in January 2016 and 2017 were included in accrued expenses and other liabilities at December 31, 2015 and 2016, respectively. We have no current plans to pay additional cash dividends on our common stock in the foreseeable future, and declaration of any future cash dividends will depend upon our financial position, strategic plans, and general business conditions. Equity Compensation Plan Descriptions In November 1997, the Board adopted and our stockholders approved the 1997 Stock Incentive Plan (the “1997 Plan”). Under the terms of the 1997 Plan, we were authorized, for a ten-year period, to grant stock options, nonvested stock, and other stock-based awards. The 1997 Plan expired in November 2007. Under such plan, options to purchase 107 shares remained outstanding as of December 31, 2016. In 2007, the Board adopted and our stockholders approved the 2007 Stock Incentive Plan. In 2010, the Board adopted and our stockholders approved the Amended and Restated 2007 Stock Incentive Plan (the “2007 Plan”), which among other things, extended the term of the 2007 Plan to 2020. In May 2016, our stockholders approved an amendment to the 2007 Plan, which authorized the issuance of 1,700 shares of common stock. Under the terms of the 2007 Plan, we are authorized for a ten-year period to grant options, stock appreciation rights, nonvested stock, nonvested stock units, and other stock-based awards to employees, officers, directors, and consultants. As of December 31, 2016, there were 194 shares eligible for future grants under the 2007 Plan. 1997 Employee Stock Purchase Plan In November 1997, the Board adopted and our stockholders approved the 1997 Employee Stock Purchase Plan (the “Purchase Plan”). The Purchase Plan authorizes the issuance of common stock to participating employees. Under the Purchase Plan, as amended, our employees are eligible to purchase company stock at 95% of the purchase price as of the last business day of each six-month offering period. An aggregate of 1,138 shares of common stock has been reserved for issuance under the Purchase Plan, of which 1,067 shares have been purchased. Accounting for Share-Based Compensation We measure the grant date fair value of equity awards given to employees and recognize that cost, adjusted for forfeitures, over the period that services are performed. We value grants with multiple vesting periods as a single award, estimate expected forfeitures based upon historical patterns of employee turnover, and record share-based compensation as a component of SG&A expenses. In 2014 and 2016, we granted nonvested stock units. No equity awards were granted in 2015, however, in previous years both nonvested stock awards and stock options were granted. We employ the Black-Scholes option valuation model to assess the grant date fair value of each option grant. The application of this model requires certain key input assumptions, including expected volatility, option term, and risk-free interest rates. Expected volatility is based on the historical volatility of our common stock. The expected term of an option grant is estimated using the historical exercise behavior of employees and directors. The risk‑free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve that corresponds most closely to the stock option’s expected average life. The following table summarizes the components of share-based compensation recorded as expense for the three years ended December 31, 2016: 2016 2015 2014 Nonvested units $ $ $ Stock options — — Pre-tax compensation expense Tax benefit Net effect on net income $ $ $ We have historically settled stock option exercises with newly issued common shares. The intrinsic value of options exercised in 2016, 2015, and 2014 was $156, $553, and $732, respectively. The following table sets forth our stock option activity in 2016: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Options Exercise Price Term (Years) Value Outstanding, January 1, 2016 $ $ Exercised Outstanding, December 31, 2016 $ $ Vested and expected to vest $ $ In 2014 and 2016, we issued nonvested stock units that settle in stock and vest over periods up to fifteen years. No awards were issued in 2015. Recipients of nonvested stock units do not possess stockholder rights. The fair value of nonvested stock units is based on the end of day market value of our common stock on the grant date. The following table summarizes our nonvested stock unit activity in 2016: Nonvested Stock Units Weighted-Average Grant Date Shares Fair Value Nonvested at January 1, 2016 $ Granted Vested Canceled Nonvested at December 31, 2016 The weighted-average grant-date fair value of nonvested stock units granted in 2014 was $22.50. No awards were granted in 2015. The total fair value of nonvested stock units that vested in 2016, 2015, and 2014 was $2,348, $2,287, and $1,854, respectively. Unearned compensation cost related to the nonvested portion of outstanding nonvested stock units was $6,037 as of December 31, 2016, and is expected to be recognized over a weighted-average period of approximately 7.7 years. Stock Equivalent Units We have also issued stock equivalent units, (“SEUs”), which settle in cash and vest ratably over four years. The fair value of these liability awards is based on the closing market price of our common stock, and is remeasured at the end of each reporting period until the SEUs vest. We report the compensation as a component of SG&A expense and the related liability as accrued payroll on the consolidated balance sheets. 2016 2015 2014 Units issued Compensation expense $ $ $

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2016
Income Taxes
Income Taxes	9. INCOME TAXES The provision for income taxes consisted of the following: Years Ended December 31, 2016 2015 2014 Current: Federal $ $ $ State Total current Deferred: Federal State Total deferred Net provision $ $ $ The components of the deferred taxes at December 31, 2016 and 2015 are as follows: 2016 2015 Deferred tax assets: Provisions for doubtful accounts $ $ Inventory costs capitalized for tax purposes Inventory valuation reserves Sales return reserves Deductible expenses, primarily employee-benefit related Accrued compensation State tax liability Revenue deferral Other Compensation under non-statutory stock option agreements State tax loss carryforwards Federal benefit for uncertain state tax positions Total gross deferred tax assets Less: Valuation allowance Net deferred tax assets Deferred tax liabilities: Goodwill and other intangibles Property and equipment Total gross deferred tax liabilities Net deferred tax liability $ $ Current deferred tax assets $ — $ Noncurrent deferred tax liability Net deferred tax liability $ $ We have state net operating loss carryforwards aggregating $951 at December 31, 2016 representing state tax benefits, net of federal taxes, of approximately $618. These loss carryforwards are subject to between five, fifteen, and twenty-year carryforward periods, with $8 expiring after 2017, $6 expiring after 2018, $5 expiring after 2019, $2 expiring after 2021, and $927 expiring beyond 2022. We have provided valuation allowances of $485 and $383 at December 31, 2016 and 2015, respectively, against the state tax loss carryforwards, representing the portion of carryforward losses that we believe are not likely to be realized. The net change in the total valuation allowance reflects a $102, $70, and $64 increase in 2016, 2015, and 2014, respectively. The valuation allowance was increased in 2016, 2015, and 2014 to offset the corresponding increase to the deferred tax asset associated with state net operating loss carryforwards. A reconciliation of our 2016, 2015, and 2014 income tax provision to total income taxes at the statutory federal tax rate is as follows: 2016 2015 2014 Federal income taxes, at statutory tax rate $ $ $ State income taxes, net of federal benefit Nondeductible expenses Other–net Tax provision $ $ $ We file one consolidated U.S. Federal income tax return that includes all of our subsidiaries as well as several consolidated, combined, and separate company returns in many U.S. state tax jurisdictions. The Internal Revenue Service completed its review of the income tax return for the 2012 tax year with no changes to the reported tax. The tax years 2012-2015 remain open to examination by the major state taxing jurisdictions in which we file. The tax years 2013-2015 remain open to examination by the Internal Revenue Service. A reconciliation of unrecognized tax benefits for 2016, 2015, and 2014, is as follows: 2016 2015 2014 Balance at January 1, $ $ $ Additions on tax positions of prior years — — Lapses of applicable statute of limitations Balance at December 31, $ $ $ We recognize interest and penalties related to unrecognized income tax benefits as a component of income tax expense, and the corresponding accrual is included as a component of our liability for unrecognized income tax benefits. During the years ended December 31, 2016, 2015, and 2014, we recognized interest and penalties totaling $62, $110, and $80, respectively. At December 31, 2016 and 2015, accrued interest aggregated $693 and $967, respectively, and accrued penalties aggregated $171 and $218, respectively. As of December 31, 2016 and 2015, all unrecognized tax benefits and the related interest and penalties, if recognized, would favorably affect our effective tax rate. We do not anticipate that total unrecognized tax benefits will change significantly due to the settlement of audits, expiration of statutes of limitations, or other reasons in the next twelve months.

EMPLOYEE BENEFIT PLAN

EMPLOYEE BENEFIT PLAN	12 Months Ended
	Dec. 31, 2016
Employee Benefit Plan
Employee Benefit Plan	10. EMPLOYEE BENEFIT PLAN We have a contributory profit-sharing and employee savings plan covering all qualified employees. No contributions to the profit-sharing element of the plan were made by us in 2016, 2015, or 2014. We made matching contributions to the employee savings element of such plan of $2,320, $2,034, and $1,873 in 2016, 2015, and 2014, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies
Commitments And Contingencies	11. COMMITMENTS AND CONTINGENCIES Operating Leases We lease our corporate headquarters and an adjacent office facility from an entity controlled by our principal stockholders. The five-year operating lease for our corporate headquarters ends November 30, 2018 and has an option to renew for an additional five-year term. The operating lease for the adjacent facility began in August 2008 and has a ten-year term with the option to renew for two additional two-year terms. We also lease several other buildings from our principal stockholders on a month-to-month basis. We believe that the above operating lease transactions were consummated on terms comparable to terms we could have obtained with unrelated third parties. In addition, we lease offices from unrelated parties with remaining terms of one to ten years. Future aggregate minimum annual lease payments under these leases at December 31, 2016 are as follows: Year Ended December 31, Related Parties Others Total 2017 $ $ $ 2018 2019 — 2020 — 2021 — 2022 and thereafter — Total rent expense aggregated $4,753, $4,904, and $4,322 for the years ended December 31, 2016, 2015, and 2014, respectively, under the terms of the operating leases described above. Such amounts included $1,640, $1,633, and $1,639 in 2016, 2015, and 2014, respectively, paid to related parties. Contingencies We are subject to various legal proceedings and claims, including patent infringement claims, which have arisen during the ordinary course of business. In the opinion of management, the outcome of such matters is not expected to have a material effect on our business, financial position, results of operations, or cash flows. We record a liability when we believe that a loss is both probable and reasonably estimable. On a quarterly basis, we review each of these legal proceedings to determine whether it is probable, reasonably possible, or remote that a liability has been incurred and, if it is at least reasonably possible, whether a range of loss can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being a loss and the estimated amount of such loss. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. We expense legal fees in the period in which they are incurred. We are subject to audits by states on sales and income taxes, unclaimed property, employment matters, and other assessments. While management believes that known and estimated liabilities have been adequately provided for, it is too early to determine the ultimate outcome of such audits, which could be assessed, and such outcomes could have a material negative impact on our financial position, results of operations, and cash flows.

OTHER RELATED-PARTY TRANSACTION

OTHER RELATED-PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2016
Other Related Party Transactions
Other Related-Party Transactions	12. OTHER RELATED-PARTY TRANSACTIONS As described in Note 11, we lease certain facilities from related parties. Other related-party transactions include the transactions summarized below. Related parties consist primarily of affiliated companies related to us through common ownership. 2016 2015 2014 Revenue: Sales of services to affiliated companies $ $ $

SEGMENT AND RELATED DISCLOSURES

SEGMENT AND RELATED DISCLOSURES	12 Months Ended
	Dec. 31, 2016
Segment and Related Disclosures
Segment and Related Disclosures	13. SEGMENT AND RELATED DISCLOSURES The internal reporting structure used by our chief operating decision maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income. Our operations are organized under three reporting segments—the SMB segment, which serves primarily small- and medium-sized businesses; the Large Account segment, which serves primarily medium-to-large corporations; and the Public Sector segment, which serves primarily federal, state, and local government and educational institutions. In addition, the Headquarters/Other group provides services in areas such as finance, human resources, information technology, marketing, and product management. Most of the operating costs associated with the Headquarters/Other group functions are charged to the operating segments based on their estimated usage of the underlying functions. We report these charges to the operating segments as “Allocations.” Certain headquarters costs relating to executive oversight and other fiduciary functions that are not allocated to the operating segments are included under the heading of Headquarters/Other in the tables below. In May 2016, we acquired Softmart, a global supplier of information technology and software services solutions. We have included the operating results for Softmart in our SMB and Large Account segments from May 27, 2016, the closing date of the acquisition. The external sales and operating results of Softmart since the date of acquisition were immaterial to our consolidated results. In October 2016, we acquired GlobalServe, which has developed a industry-leading tool that simplifies customers’ global IT procurement. We have included the operating results for GlobalServe in our Large Account segment from October 11, 2016, the closing date of the acquisition. The external sales and operating results of GlobalServe since the date of acquisition were immaterial to our consolidated results. Net sales presented below exclude inter-segment product revenues. Segment information applicable to our reportable operating segments for the years ended December 31, 2016, 2015, and 2014 is shown below: Years Ended December 31, 2016 2015 2014 Net sales: SMB $ $ $ Large Account Public Sector Total net sales $ $ $ Operating income (loss): SMB $ $ $ Large Account Public Sector Headquarters/Other Total operating income Interest expense Income before taxes $ $ $ Selected operating expense: Depreciation and amortization: SMB $ $ $ Large Account Public Sector Headquarters/Other Total depreciation and amortization $ $ $ Total assets: SMB $ $ Large Account Public Sector Headquarters/Other Total assets $ $ The assets of our operating segments presented above consist primarily of accounts receivable, intercompany receivable, goodwill, and other intangibles. Goodwill of $66,236 and $7,366 is held by our Large Account and SMB segments, respectively, for the year ended December 31, 2016. Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, and property and equipment. Total assets for the Headquarters/Other group are presented net of intercompany balances eliminations of $49,937 and $36,752 for the years ended December 31, 2016 and 2015, respectively. Our capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade our management information systems. These systems serve all of our subsidiaries, to varying degrees, and as a result, our CODM does not evaluate capital expenditures on a segment basis. Substantially, all of our sales in 2016, 2015, and 2014 were made to customers located in the United States. Shipments to customers located in foreign countries were not more than 2% of total net sales in 2016, 2015, and 2014. All of our assets at December 31, 2016 and 2015 were located in the United States. Our primary target customers are SMBs, federal, state, and local government agencies, educational institutions, and medium-to-large corporate accounts. No single customer accounted for more than 2% of total net sales in 2016, 2015, or 2014. While no single agency of the federal government comprised more than 2% of total sales, aggregate sales to the federal government were 7.5%, 6.7%, and 6.5% in 2016, 2015, and 2014, respectively.

QUARTERLY FINANCIAL RESULTS (UN

QUARTERLY FINANCIAL RESULTS (UNAUDITED)	12 Months Ended
	Dec. 31, 2016
Quarterly Financial Results (Unaudited)
Quarterly Financial Results (Unaudited)	14. QUARTERLY FINANCIAL RESULTS (UNAUDITED) The following table sets forth certain unaudited quarterly data of the Company for each of the calendar quarters in 2016 and 2015. This information has been prepared on the same basis as the annual financial statements, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the selected quarterly information when read in conjunction with the annual financial statements and the notes thereto included elsewhere in this document. The quarterly operating results are not necessarily indicative of future results of operations. Quarters Ended March 31, June 30, September 30, December 31, 2016 2016 2016 2016 Net sales $ $ $ $ Cost of sales Gross profit Selling, general and administrative expenses Income from operations Interest expense Income before taxes Income tax provision Net income $ $ $ $ Earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ Weighted average common shares outstanding: Basic Diluted Quarters Ended March 31, June 30, September 30, December 31, 2015 2015 2015 2015 Net sales $ $ $ $ Cost of sales Gross profit Selling, general and administrative expenses Income from operations Interest expense Income before taxes Income tax provision Net income $ $ $ $ Earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ Weighted average common shares outstanding: Basic Diluted

SCHEDULE II - VALUATION AND QUA

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	12 Months Ended
	Dec. 31, 2016
Schedule II - Valuation and Qualifying Accounts
Schedule II-Valuation And Qualifying Accounts	SCHEDULE I (amounts in thousands) Balance at Charged to Balance at Beginning Costs and Deductions/ End of of Period Expenses Write-Offs Period Description Allowance for Sales Returns Year Ended December 31, 2014 $ $ Year Ended December 31, 2015 $ $ Year Ended December 31, 2016 $ $ Allowance for Doubtful Accounts Year Ended December 31, 2014 $ $ Year Ended December 31, 2015 $ $ Year Ended December 31, 2016 $ $

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2016
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of PC Connection, Inc. and its subsidiaries, all of which are wholly-owned. Intercompany transactions and balances are eliminated in consolidation.
Use of Estimates in the Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period. By nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates and assumptions.
Revenue Recognition	Revenue Recognition Revenue on product sales is recognized at the point in time when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred, and there is a reasonable assurance of collection of the sales proceeds. We generally obtain oral or written purchase authorizations from our customers for a specified amount of product at a specified price. Because we either (i) have a general practice of covering customer losses while products are in-transit despite title transferring at the point of shipment or (ii) have FOB–destination shipping terms specifically set out in our arrangements with federal agencies and certain commercial customers, delivery is deemed to have occurred at the point in time when the product is received by the customer. We provide our customers with a limited thirty-day right of return generally limited to defective merchandise. Revenue is recognized at delivery and a reserve for sales returns is recorded. We make reasonable and reliable estimates of product returns based on significant historical experience and record our sales reserves as a reduction of revenues and either as offsets to accounts receivable or, for customers who have already paid, as offsets to accrued expenses. At December 31, 2016, we recorded sales reserves of $3,709 and $220 as components of accounts receivable and accrued expenses, respectively. At December 31, 2015, we recorded sales reserves of $3,235 and $178 as components of accounts receivable and accrued expenses, respectively. All amounts billed to a customer in a sales transaction related to shipping and handling, if any, represent revenues earned for the goods provided, and these amounts have been classified as “net sales.” Costs related to such shipping and handling billings are classified as “cost of sales.” Sales are reported net of sales, use, or other transaction taxes that are collected from customers and remitted to taxing authorities. We use our own engineering personnel in projects involving the design and installation of systems and networks, and we also engage third-party service providers to perform warranty maintenance, implementations, asset disposals, and other services. This service revenue represents a small percentage of our consolidated revenue. We evaluate such engagements to determine whether we or the third party assumes the general risk and reward of ownership in these transactions. For those transactions in which we do not assume the risk and reward but instead act as an agent, we recognize the transaction revenue on a net basis. Under net sales recognition, the cost of the third party is recorded as a reduction to the selling price, resulting in net sales being equal to the gross profit on the transaction. In those engagements in which we are the principal and primary obligor, we report the sale on a gross basis, and the cost of the service provider is recognized in cost of goods sold. Similarly, we recognize revenue from agency sales transactions on a net sales basis. In agency sales transactions, we facilitate product sales by equipment and software manufacturers directly to our customers and receive agency, or referral, fees for such transactions. We do not take title to the products or assume any maintenance or return obligations in these transactions; title is passed directly from the supplier to our customer. Amounts recognized on a net basis included in net sales for such third-party services and agency sales transactions were $30,234, $24,158, and $25,696 for the years ended December 31, 2016, 2015, and 2014, respectively. In certain revenue arrangements, our contracts require that we provide multiple units of hardware, software, or services deliverables. Under these multiple-element arrangements, each service performed and product delivered is considered a separate deliverable and qualifies as a separate unit of accounting. For material multiple element arrangements, we allocate revenue based on vendor-specific objective evidence of fair value of the underlying services and products. If we were to enter into a multiple element arrangement in which vendor-specific objective evidence was not available, we would utilize third-party evidence to allocate the selling price. If neither vendor-specific objective evidence nor third-party evidence was available, we would estimate the selling price based on market price and company specific factors.
Cost of Sales and Certain Other Costs	Cost of Sales and Certain Other Costs Cost of sales includes the invoice cost of the product, direct employee and third party cost of services, direct costs of packaging, inbound and outbound freight, and provisions for inventory obsolescence, adjusted for discounts, rebates, and other vendor allowances.
Cash and Cash Equivalents	Cash and Cash Equivalents We consider all highly liquid short-term investments with original maturities of 90 days or less to be cash equivalents. The carrying value of our cash equivalents approximates fair value. The majority of payments due from credit card processors and banks for third-party credit card and debit card transactions process within one to five business days. All credit card and debit card transactions that process in less than seven days are classified as cash and cash equivalents. Amounts due from banks for credit card transactions classified as cash equivalents totaled $4,345 and $6,786 at December 31, 2016 and 2015, respectively.
Accounts Receivable	Accounts Receivable We perform ongoing credit evaluations of our customers and adjust credit limits based on payment history and customer creditworthiness. We maintain an allowance for estimated doubtful accounts based on our historical experience and the customer credit issues identified. Our customers do not post collateral for open accounts receivable. We monitor collections regularly and adjust the allowance for doubtful accounts as necessary to recognize any changes in credit exposure. Trade receivables are written off in the period in which they are deemed uncollectible. Recoveries of trade receivables previously charged are recorded when received.
Inventories	Inventories Inventories (all finished goods) consisting of software packages, computer systems, and peripheral equipment, are stated at cost (determined under a weighted-average cost method which approximates the first-in, first-out method) or market, whichever is lower. Inventory quantities on hand are reviewed regularly, and allowances are maintained for obsolete, slow moving, and nonsalable inventory.
Vendor Consideration	Vendor Consideration We receive funding from merchandise vendors for price protections, discounts, product rebates, and other programs. These allowances are treated as a reduction of the vendor’s prices and are recorded as adjustments to cost of sales or inventory, as applicable. Allowances for product rebates that require certain volumes of product sales or purchases are recorded as the related milestones are probable of being met.
Advertising Costs and Vendor consideration	Advertising Costs and Vendor Consideration Costs of producing and distributing catalogs are charged to expense in the period in which the catalogs are first circulated. Other advertising costs are expensed as incurred. Vendors have the ability to place advertisements in our catalogs or fund other advertising activities for which we receive advertising consideration. This vendor consideration, to the extent that it represents specific reimbursements of incremental and identifiable costs, is offset against SG&A expenses. Advertising consideration that cannot be associated with a specific program or that exceeds the fair value of advertising expense associated with that program is classified as an offset to cost of sales. Our vendor partners generally consolidate their funding of advertising and other marketing programs, and accordingly, we classify substantially all vendor consideration as a reduction of cost of sales rather than a reduction of advertising expense. Advertising expense, which is classified as a component of SG&A expenses, totaled $16,083, $15,689, and $15,767, for the years ended December 31, 2016, 2015, and 2014, respectively.
Property and Equipment	Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is provided for financial reporting purposes over the estimated useful lives of the assets ranging from three to seven years. Computer software, including licenses and internally developed software, is capitalized and amortized over lives ranging from three to seven years. Depreciation is recorded using the straight-line method. Leasehold improvements and facilities under capital leases are amortized over the terms of the related leases or their useful lives, whichever is shorter, whereas for income tax reporting purposes, they are amortized over the applicable tax lives. Costs incurred to develop internal-use software during the application development stage are recorded in property and equipment at cost. External direct costs of materials and services consumed in developing or obtaining internal-use computer software and payroll-related costs for employees developing internal-use computer software projects, to the extent of their time spent directly on the project and specific to application development, are capitalized. When events or circumstances indicate a potential impairment, we evaluate the carrying value of property and equipment based upon current and anticipated undiscounted cash flows. We recognize impairment when it is probable that such estimated future cash flows will be less than the asset carrying value.
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets Our intangible assets consist of (1) goodwill, which is not subject to amortization; (2) an internet domain name, which is an indefinite-lived intangible not subject to amortization; and (3) amortizing intangibles, which consist of customer lists, trade names, and certain technology licensing agreements, which are being amortized over their useful lives. Note 3 describes the annual impairment methodology that we employ on January 1 st of each year in calculating the recoverability of goodwill and non-amortizing intangibles. This same impairment test is performed at other times during the course of a year should an event occur or circumstance change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Recoverability of amortizing intangible assets is assessed only when events have occurred that may give rise to impairment. When a potential impairment has been identified, forecasted undiscounted net cash flows of the operations to which the asset relates are compared to the current carrying value of the long-lived assets present in that operation. If such cash flows are less than such carrying amounts, long-lived assets including such intangibles, are written down to their respective fair values.
Concentrations	Concentrations Concentrations of credit risk with respect to trade account receivables are limited due to the large number of customers comprising our customer base. No single customer accounted for more than 2% of total net sales in 2016, 2015, and 2014. While no single agency of the federal government comprised more than 2% of total sales, aggregate sales to the federal government as a percentage of total net sales were 7.5%, 6.7%, and 6.5% in 2016, 2015, and 2014, respectively. Product purchases from Ingram Micro, Inc. (“Ingram”), our largest supplier, accounted for approximately 21% of our total product purchases in 2016 and 2015, respectively, and 25% in 2014. Purchases from Synnex Corporation (“Synnex”) comprised 13%, 15%, and 13% of our total product purchases in 2016, 2015, and 2014, respectively. No other vendor supplied more than 10% of our total product purchases in 2016, 2015, or 2014. We believe that, while we may experience some short-term disruption, alternative sources for products obtained directly from Ingram and Synnex are available to us. Products manufactured by HP represented 20% of our net sales in 2016 and 22% in both 2015 and 2014. We believe that in the event we experience either a short-term or permanent disruption of supply of HP products, such disruption would likely have a material adverse effect on our results of operations and cash flows.
Earnings Per Share	Earnings Per Share Basic earnings per common share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to nonvested stock units and stock options outstanding, if dilutive. The following table sets forth the computation of basic and diluted earnings per share: 2016 2015 2014 Numerator: Net income $ $ $ Denominator: Denominator for basic earnings per share Dilutive effect of employee stock awards Denominator for diluted earnings per share Earnings per share: Basic $ $ $ Diluted $ $ $ For the years ended December 31, 2016, 2015, and 2014, the following outstanding nonvested stock units and stock options were excluded from the computation of diluted earnings per share because including them would have had an anti-dilutive effect: 2016 2015 2014 Employee stock awards — — 98
Comprehensive Income	Comprehensive Income We had no items of comprehensive income, other than our net income for each of the periods presented.
Recently Issued Financial Accounting Standards	Recently Issued Financial Accounting Standards On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which amends the existing accounting standards for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the mandatory effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, the Company may adopt the standard in either its first quarter of 2017 or 2018. An entity may choose to adopt the new standard either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the new standard. We are in the process of determining the effect that the adoption will have on our consolidated financial statements. Based on our analysis to date, we have reached the following tentative conclusions regarding the new standard and how we expect it to affect our consolidated financial statements and related disclosures: · We expect to adopt the standard in the first quarter of 2018 and will not early adopt. · We expect to use the full restrospective method. Such method provides that upon applying the new standard, prior periods will be retrospectively adjusted and the cumulative effect of the change recognized in the opening retained earnings as of January 1, 2016. · We believe that since substantially all of our revenue is contractual, substantially all of our revenue falls within the scope of ASU No. 2014-09, as amended. · As discussed above, our hardware and software revenue is generally recognized on a gross basis upon delivery. Upon adoption of the new standard, we do not expect this to change. However, we are continuing to analyze each of our material revenue streams to determine any changes that may be required under the new standard. · As discussed above, we hold inventories not available for sale related to certain product sales transactions in which we are warehousing the product and will be deploying the product to our clients’ designated locations subsequent to period-end. We are currently still evaluating the effect of the new standard on our inventories not available for sale to identify the differing performance conditions within the underlying contracts and to determine if a portion of revenue under the contracts should be recognized at an earlier point in time than we are recognizing under current accounting standards. · 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. Our analysis and evaluation of the new standard will continue through its effective date in the first quarter of 2018. A substantial amount of work remains to be completed due to the complexity of the new standard, the application of judgment, and the requirement for the use of estimates in applying the new standard, as well as the volume of our client portfolio and the related terms and conditions of our contracts that must be reviewed. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory , which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. This standard is effective for the Company prospectively beginning January 1, 2017, with early adoption permitted. We do not expect the adoption of ASU 2015-11 to have a material impact on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes , to simplify the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and deferred tax assets are required to be classified as non-current on the consolidated balance sheet. ASU 2015-17 will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016 with early adoption permitted. The Company elected to early adopt ASU 2015-17 on January 1, 2016, prospectively, as permitted, and reclassified $7,909 of current deferred tax assets to non-current liabilities upon adoption of the standard. The prior reporting period was not retroactively adjusted. The adoption of the guidance had no impact on the Company’s condensed consolidated statements of income and comprehensive income. In February 2016, the FASB issued ASU 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation–Stock Compensation (Topic 718) . The new standard simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under this guidance, a company recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the additional paid-in capital pool and reduces the complexity in accounting for excess tax benefits and tax deficiencies. The new standard is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods, however, early adoption is allowed. We do not expect the adoption of ASU 2016-09 to have a material impact on our consolidated financial statements In January 2017, the FASB issued ASU 2017-04, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity's testing of reporting units for goodwill impairment and clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for us beginning January 1, 2020 for both interim and annual reporting periods. We are currently assessing the potential impact of the adoption of ASC 2017-04 on our consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN23

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2016
Summary of Significant Accounting Policies
Computation of Basic and Diluted Earnings Per Share	2016 2015 2014 Numerator: Net income $ $ $ Denominator: Denominator for basic earnings per share Dilutive effect of employee stock awards Denominator for diluted earnings per share Earnings per share: Basic $ $ $ Diluted $ $ $
Outstanding Non-vested Stock Units and Stock Options Excluded from Computation of Diluted Earnings Per Share	2016 2015 2014 Employee stock awards — — 98

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)	12 Months Ended
	Dec. 31, 2016
Softmart
Acquisitions
Components of the net assets acquired and liabilities assumed at fair value	Purchase Price Allocation Current assets $ Fixed assets Goodwill Customer relationships Total assets acquired Acquired liabilities Net assets acquired Less cash acquired Purchase price at closing, net of cash acquired $
GlobalServe
Acquisitions
Components of the net assets acquired and liabilities assumed at fair value	Purchase Price Allocation Current assets $ Fixed assets Goodwill Customer relationships Total assets acquired Acquired liabilities Deferred taxes, unrecognized tax benefits Net assets acquired Less cash acquired Purchase price at closing, net of cash acquired $

GOODWILL AND OTHER INTANGIBLE25

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure
Carrying Amount of Goodwill	Balance at December 31, 2015 SMB Large Account Public Sector Total Goodwill, gross $ $ $ $ Accumulated impairment losses ─ Net balance $ — $ $ — $ Balance at December 31, 2016 SMB Large Account Public Sector Total Goodwill, gross $ $ $ $ Accumulated impairment losses ─ Net balance $ $ $ — $
Intangible Assets and Related Accumulated Amortization	December 31, 2016 December 31, 2015 Estimated Gross Accumulated Net Gross Accumulated Net Useful Lives Amount Amortization Amount Amount Amortization Amount Customer List 8 $ $ $ $ $ $ Tradename 5 Customer Relationships 10 — — — Total Intangible Assets $ $ $ $ $ $
Estimated Amortization Expense	For the Years Ended December 31, 2017 $ 2018 2019 2020 2021 2022 and thereafter $

ACCOUNTS RECEIVABLE (Tables)

ACCOUNTS RECEIVABLE (Tables)	12 Months Ended
	Dec. 31, 2016
Accounts Receivable
Accounts Receivable	December 31, 2016 2015 Trade $ $ Vendor returns, consideration and other Due from employees Due from affiliates — Total Gross Accounts Receivable Allowances for: Sales returns Doubtful accounts Accounts Receivable, net $ $

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2016
Property and Equipment
Property and Equipment	December 31, 2016 2015 Computer software, including licenses and internally-developed software $ $ Furniture and equipment Leasehold improvements Total Accumulated depreciation and amortization Property and equipment, net $ $

STOCKHOLDERS' EQUITY AND SHAR28

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2016
Dividend declared	2016 2015 2014 Dividend per share $ 0.34 $ 0.40 $ 0.40 Stockholder record date 12/30/2016 12/29/2015 12/01/2014 Total dividend $ 9,041 $ 10,591 $ 10,527 Payment date 1/12/2017 1/12/2016 12/15/2014
Components of Share-Based Compensation Recorded as Expense	2016 2015 2014 Nonvested units $ $ $ Stock options — — Pre-tax compensation expense Tax benefit Net effect on net income $ $ $
Stock Option Activity	Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Options Exercise Price Term (Years) Value Outstanding, January 1, 2016 $ $ Exercised Outstanding, December 31, 2016 $ $ Vested and expected to vest $ $
Nonvested Stock Unit Activity	Nonvested Stock Units Weighted-Average Grant Date Shares Fair Value Nonvested at January 1, 2016 $ Granted Vested Canceled Nonvested at December 31, 2016
Stock Equivalent Units (SEUs)
Stock Equivalent Units	2016 2015 2014 Units issued Compensation expense $ $ $

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2016
Income Taxes
Provision for Income Taxes	Years Ended December 31, 2016 2015 2014 Current: Federal $ $ $ State Total current Deferred: Federal State Total deferred Net provision $ $ $
Components of Deferred Taxes	2016 2015 Deferred tax assets: Provisions for doubtful accounts $ $ Inventory costs capitalized for tax purposes Inventory valuation reserves Sales return reserves Deductible expenses, primarily employee-benefit related Accrued compensation State tax liability Revenue deferral Other Compensation under non-statutory stock option agreements State tax loss carryforwards Federal benefit for uncertain state tax positions Total gross deferred tax assets Less: Valuation allowance Net deferred tax assets Deferred tax liabilities: Goodwill and other intangibles Property and equipment Total gross deferred tax liabilities Net deferred tax liability $ $ Current deferred tax assets $ — $ Noncurrent deferred tax liability Net deferred tax liability $ $
Reconciliation of Income Tax Provision to Total Income Taxes at Statutory Federal Tax Rate	2016 2015 2014 Federal income taxes, at statutory tax rate $ $ $ State income taxes, net of federal benefit Nondeductible expenses Other–net Tax provision $ $ $
Reconciliation of Unrecognized Tax Benefits	2016 2015 2014 Balance at January 1, $ $ $ Additions on tax positions of prior years — — Lapses of applicable statute of limitations Balance at December 31, $ $ $

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies
Future Aggregate Minimum Annual Lease Payments Under Operating Leases	Future aggregate minimum annual lease payments under these leases at December 31, 2016 are as follows: Year Ended December 31, Related Parties Others Total 2017 $ $ $ 2018 2019 — 2020 — 2021 — 2022 and thereafter —

OTHER RELATED-PARTY TRANSACTI31

OTHER RELATED-PARTY TRANSACTIONS (Tables)	12 Months Ended
	Dec. 31, 2016
Other Related Party Transactions
Other Related-Party Transactions	2016 2015 2014 Revenue: Sales of services to affiliated companies $ $ $

SEGMENT AND RELATED DISCLOSUR32

SEGMENT AND RELATED DISCLOSURES (Tables)	12 Months Ended
	Dec. 31, 2016
Segment and Related Disclosures
Segment Information Applicable to Reportable Operating Segments	Years Ended December 31, 2016 2015 2014 Net sales: SMB $ $ $ Large Account Public Sector Total net sales $ $ $ Operating income (loss): SMB $ $ $ Large Account Public Sector Headquarters/Other Total operating income Interest expense Income before taxes $ $ $ Selected operating expense: Depreciation and amortization: SMB $ $ $ Large Account Public Sector Headquarters/Other Total depreciation and amortization $ $ $ Total assets: SMB $ $ Large Account Public Sector Headquarters/Other Total assets $ $

QUARTERLY FINANCIAL RESULTS (33

QUARTERLY FINANCIAL RESULTS (UNAUDITED) (Tables)	12 Months Ended
	Dec. 31, 2016
Quarterly Financial Results (Unaudited)
Quarterly Operating Results (Unaudited)	Quarters Ended March 31, June 30, September 30, December 31, 2016 2016 2016 2016 Net sales $ $ $ $ Cost of sales Gross profit Selling, general and administrative expenses Income from operations Interest expense Income before taxes Income tax provision Net income $ $ $ $ Earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ Weighted average common shares outstanding: Basic Diluted Quarters Ended March 31, June 30, September 30, December 31, 2015 2015 2015 2015 Net sales $ $ $ $ Cost of sales Gross profit Selling, general and administrative expenses Income from operations Interest expense Income before taxes Income tax provision Net income $ $ $ $ Earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ Weighted average common shares outstanding: Basic Diluted

SUMMARY OF SIGNIFICANT ACCOUN34

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)segment	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)
Number of sales segments | segment	3
Third-party services and agency sales transactions	$ 30,234	$ 24,158	$ 25,696
Amounts due from banks for credit card transactions, classified as cash equivalents	$ 4,345	6,786
Minimum
Property and equipment, estimated useful lives	3 years
Maximum
Property and equipment, estimated useful lives	7 years
Computer Software | Minimum
Estimated useful lives	3 years
Computer Software | Maximum
Estimated useful lives	7 years
Selling, General and Administrative Expenses
Advertising expense	$ 16,083	15,689	$ 15,767
Accounts Receivable
Sale reserves	3,709	3,235
Accrued Expenses
Sale reserves	$ 220	$ 178

SUMMARY OF SIGNIFICANT ACCOUN35

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration Risk (Details) - Net Sales	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Customer | Single Customer | Maximum
Concentration risk
Percentage of total net sales	2.00%	2.00%	2.00%
Customer | Federal Government Agencies
Concentration risk
Percentage of total net sales	7.50%	6.70%	6.50%
Customer | Single Federal Government Agency | Maximum
Concentration risk
Percentage of total net sales	2.00%	2.00%	2.00%
Supplier | Ingram Micro Inc Class
Concentration risk
Percentage of product purchases	21.00%	21.00%	25.00%
Supplier | Synnex Corporation
Concentration risk
Percentage of product purchases	13.00%	15.00%	13.00%
Supplier | Other vendor suppliers | Maximum
Concentration risk
Percentage of product purchases	10.00%	10.00%	10.00%
Supplier | Hewlett Packard Company
Concentration risk
Products manufactured by HP as a percentage of net sales	20.00%	22.00%	22.00%

SUMMARY OF SIGNIFICANT ACCOUN36

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Numerator:
Net income	$ 12,997	$ 13,593	$ 12,458	$ 9,063	$ 13,613	$ 13,001	$ 11,629	$ 8,584	$ 48,111	$ 46,827	$ 42,681
Denominator:
Denominator for basic earnings per share	26,569	26,542	26,501	26,499	26,459	26,423	26,363	26,346	26,528	26,398	26,246
Dilutive effect of employee stock awards									191	218	266
Denominator for diluted earnings per share	26,738	26,736	26,691	26,671	26,632	26,622	26,616	26,593	26,719	26,616	26,512
Earnings per share:
Basic	$ 0.49	$ 0.51	$ 0.47	$ 0.34	$ 0.51	$ 0.49	$ 0.44	$ 0.33	$ 1.81	$ 1.77	$ 1.63
Diluted	$ 0.49	$ 0.51	$ 0.47	$ 0.34	$ 0.51	$ 0.49	$ 0.44	$ 0.32	$ 1.80	$ 1.76	$ 1.61

SUMMARY OF SIGNIFICANT ACCOUN37

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Antidilutive Securities Excluded From Computation Of Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015
Employee stock awards	98
New accounting pronouncements
Current deferred tax assets			$ 7,909
ASU 2015-17 | New Accounting Pronouncement, Early Adoption, Effect | Reclassification
New accounting pronouncements
Current deferred tax assets		$ (7,909)
Non-current liabilities		$ 7,909

ACQUISITIONS - (Details)

ACQUISITIONS - (Details) - USD ($) $ in Thousands	Oct. 11, 2016	May 27, 2016	Mar. 27, 2016	Dec. 31, 2016	Dec. 31, 2015
Components of purchase price:
Goodwill				$ 73,602	$ 51,276
Purchase price at closing, net of cash acquired				42,990
Softmart
Acquisition
Price paid at closing		$ 31,889
Components of purchase price:
Current assets			$ 22,812
Fixed assets			343
Goodwill			14,314
Total assets acquired			48,769
Acquired liabilities			(16,252)
Net assets acquired			32,517
Less cash acquired			(628)
Purchase price at closing, net of cash acquired			31,889
Softmart | Customer relationships
Components of purchase price:
Intangible asset			$ 11,300
GlobalServe
Components of purchase price:
Current assets	$ 1,486
Fixed assets	4,609
Goodwill	8,012
Total assets acquired	15,007
Acquired liabilities	(734)
Deferred taxes, unrecognized tax benefits	(2,390)
Net assets acquired	11,883
Less cash acquired	(782)
Purchase price at closing, net of cash acquired	11,101
Goodwill related to acquisition deductible for tax purposes	0
GlobalServe | Customer relationships
Components of purchase price:
Intangible asset	900
Selling, General and Administrative Expenses | Softmart
Acquisition
Transaction costs related to acquisition				357
Selling, General and Administrative Expenses | GlobalServe
Acquisition
Transaction costs related to acquisition				118
Small and Medium Sized Businesses Segment
Components of purchase price:
Goodwill				7,366
Small and Medium Sized Businesses Segment | Softmart
Components of purchase price:
Goodwill		7,366
Large Account Segment
Components of purchase price:
Goodwill				$ 66,236	$ 51,276
Large Account Segment | Softmart
Components of purchase price:
Goodwill		$ 6,948
Large Account Segment | GlobalServe
Components of purchase price:
Goodwill	$ 8,012

GOODWILL AND OTHER INTANGIBLE39

GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure
Weighted average cost of capital rate	10.90%
Estimated terminal growth rate	5.00%
Working capital requirements	7.50%
Amortization expense	$ 1,281	$ 735	$ 901

GOODWILL AND OTHER INTANGIBLE40

GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Goodwill
Goodwill, gross	$ 82,409	$ 60,083
Accumulated impairment losses	(8,807)	(8,807)
Net balance	73,602	51,276
Small and Medium Sized Businesses Segment
Goodwill
Goodwill, gross	8,539	1,173
Accumulated impairment losses	(1,173)	(1,173)
Net balance	7,366
Large Account Segment
Goodwill
Goodwill, gross	66,236	51,276
Net balance	66,236	51,276
Public Sector Segment
Goodwill
Goodwill, gross	7,634	7,634
Accumulated impairment losses	$ (7,634)	$ (7,634)

GOODWILL AND OTHER INTANGIBLE41

GOODWILL AND OTHER INTANGIBLE ASSETS - Amortizable Intangible Assets and Related Accumulated Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Intangible Assets
Indefinite-lived intangible assets	$ 450
Gross Amount	16,790	$ 4,590
Accumulated Amortization	4,654	3,372
Net Amount	12,136	1,218
Amortization expense	$ 1,281	735	$ 901
Customer List
Intangible Assets
Estimated useful lives	8 years
Gross Amount	$ 3,400	3,400
Accumulated Amortization	2,861	2,499
Net Amount	$ 539	901
Tradename
Intangible Assets
Estimated useful lives	5 years
Gross Amount	$ 1,190	1,190
Accumulated Amortization	1,111	873
Net Amount	$ 79	$ 317
Customer relationships
Intangible Assets
Estimated useful lives	10 years
Acquired estimated useful lives	10 years
Gross Amount	$ 12,200
Accumulated Amortization	682
Net Amount	$ 11,518

GOODWILL AND OTHER INTANGIBLE42

GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Amortization Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure
2,017	$ 1,582
2,018	1,441
2,019	1,256
2,020	1,220
2,021	1,220
2022 and thereafter	5,417
Net Amount	$ 12,136	$ 1,218

ACCOUNTS RECEIVABLE (Details)

ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts receivable
Trade	$ 384,709	$ 328,319
Vendor returns, consideration, and other	33,020	33,064
Due from employees	173	155
Due from affiliates		61
Total Gross Accounts Receivable	417,902	361,599
Doubtful accounts	(2,310)	(2,219)
Accounts Receivable, net	411,883	356,145
Accounts Receivable
Accounts receivable
Sales returns	$ (3,709)	$ (3,235)

PROPERTY AND EQUIPMENT - Summar

PROPERTY AND EQUIPMENT - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property and Equipment
Computer software, including licenses and internally-developed software	$ 69,006	$ 61,468
Furniture and equipment	31,218	28,663
Leasehold improvements	7,300	8,124
Total	107,524	98,255
Accumulated depreciation and amortization	(68,122)	(66,028)
Property and equipment, net	$ 39,402	$ 32,227

PROPERTY AND EQUIPMENT - Deprec

PROPERTY AND EQUIPMENT - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property and Equipment
Depreciation and amortization	$ 9,172	$ 8,226	$ 7,191

BANK BORROWINGS (Detail)

BANK BORROWINGS (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Subordinated Borrowing
Line of credit, borrowing capacity	$ 50,000
Credit facility, expiration date	Feb. 10, 2022
Line of credit, maximum borrowing capacity	$ 80,000
Debt instrument, description of variable rate basis	one-month LIBOR
Debt ratio	2
Line of credit, outstanding borrowing	$ 0	$ 0
Line of credit, available for borrowing	$ 50,000	$ 50,000
Prime Rate
Subordinated Borrowing
Debt instrument, interest rate	3.75%
One-month LIBOR rate
Subordinated Borrowing
Debt instrument, interest rate	0.77%

TRADE CREDIT AGREEMENTS (Detail

TRADE CREDIT AGREEMENTS (Details) $ in Thousands	Dec. 31, 2016USD ($)Institution	Dec. 31, 2015USD ($)Institution
Trade credit agreements
Number of financial institutions facilitating purchase of inventory | Institution	2	2
Maximum
Trade credit agreements
Amount owed to financial institution for inventory financing	$ 65,000
Accounts Payable
Trade credit agreements
Amount owed to financial institution for inventory financing	$ 33,061	$ 23,044

STOCKHOLDERS' EQUITY AND SHAR48

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended			36 Months Ended
	Nov. 30, 1997	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	May 31, 2014	Dec. 31, 2001
Stockholders' equity and share-based compensation
Preferred Stock, shares authorized		10,000,000	10,000,000		10,000,000
Preferred Stock, par value		$ 0.01	$ 0.01		$ 0.01
Preferred Stock, shares outstanding		0	0		0
Treasury stock, shares		1,856,000	1,856,000		1,856,000
Shares Granted			0
Intrinsic value options exercised		$ 156	$ 553	$ 732
1997 Stock Incentive Plan
Stockholders' equity and share-based compensation
Options outstanding		107,000			107,000
Term of approved stock-based compensation plan	10 years
Stock Incentive Plan 2007
Stockholders' equity and share-based compensation
Term of approved stock-based compensation plan		10 years
Shares authorized for issuance under stock incentive plan						1,700,000
Shares available for future grant		194,000			194,000
1997 Employee Stock Purchase Plan
Stockholders' equity and share-based compensation
Purchase price under employee stock purchase plan as a percentage of price as of the last day of each six month offering period		95.00%
Common stock reserved for issuance		1,138,000			1,138,000
Share purchased under employee stock purchase plan		1,067,000
Nonvested Stock Units
Stockholders' equity and share-based compensation
Granted		117,000	0
Weighted-average grant-date fair values of nonvested stock awards granted		$ 24.72		$ 22.50
Total fair values of nonvested stock awards that vested		$ 2,348	$ 2,287	$ 1,854
Unearned compensation cost		$ 6,037			$ 6,037
Unrecognized compensation costs, weighted average period of recognition		7 years 8 months 12 days
Stock Equivalent Units (SEUs)
Stockholders' equity and share-based compensation
Granted		23,000	95,000	99,000
Vesting period		4 years
Share repurchase program 2001
Stockholders' equity and share-based compensation
Number of share repurchased					0
Treasury stock, shares		1,682,000			1,682,000
Amount of aggregated share repurchased		$ 12,233			$ 12,233
Maximum | Nonvested Stock Units
Stockholders' equity and share-based compensation
Vesting period		15 years		15 years
Maximum | Share repurchase program 2001
Stockholders' equity and share-based compensation
Repurchase of common stock, authorized amount							$ 15,000
Maximum approximate dollar value of shares that may yet be purchased		$ 2,767			$ 2,767
Maximum | Share repurchase program 2014
Stockholders' equity and share-based compensation
Repurchase of common stock, authorized amount				$ 15,000

STOCKHOLDERS' EQUITY AND SHAR49

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Dividend Payments (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share
Dividend per share	$ 0.34	$ 0.40	$ 0.40
Stockholder record date	Dec. 30, 2016	Dec. 29, 2015	Dec. 1, 2014
Total dividend	$ 9,041	$ 10,591	$ 10,527
Payment date	Jan. 12, 2017	Jan. 12, 2016	Dec. 15, 2014

STOCKHOLDERS' EQUITY AND SHAR50

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Components of Share-Based Compensation Recorded as Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Stockholders' equity and share-based compensation
Pre-tax compensation expense	$ 1,049	$ 994	$ 929
Tax benefit	(420)	(398)	(355)
Net effect on net income	629	596	574
Stock Options
Stockholders' equity and share-based compensation
Pre-tax compensation expense			(17)
Nonvested units
Stockholders' equity and share-based compensation
Pre-tax compensation expense	$ 1,049	$ 994	$ 946

STOCKHOLDERS' EQUITY AND SHAR51

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Options
Outstanding at beginning of period	168
Exercised	(11)
Outstanding at end of period	157	168
Vested and expected to vest	157
Weighted Average Exercise Price
Outstanding at beginning of period	$ 11.24
Exercised	13.13
Outstanding at end of period	11.12	$ 11.24
Vested and expected to vest	$ 11.12
Weighted Average Remaining Contractual Term (Years)
Outstanding at end of period	1 year 5 months 9 days	2 years 4 months 21 days
Vested and expected to vest	1 year 5 months 9 days
Aggregate Intrinsic Value
Outstanding at end of period	$ 2,670	$ 1,911
Vested and expected to vest	$ 2,670

STOCKHOLDERS' EQUITY AND SHAR52

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Nonvested Stock Award and Unit Activity (Details) - Nonvested Stock Units - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Shares
Nonvested shares beginning balance	383,000
Granted	117,000	0
Vested	(90,000)
Canceled	(56,000)
Nonvested shares ending balance	354,000	383,000
Weighted-Average Grant Date Fair Value
Nonvested shares beginning balance	$ 16.45
Granted	24.72		$ 22.50
Vested	12.62
Canceled	21.62
Nonvested shares ending balance	$ 19.34	$ 16.45

STOCKHOLDERS' EQUITY AND SHAR53

STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Stock Equivalent Units (Details) - Stock Equivalent Units (SEUs) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Stockholders' equity and share-based compensation
Units issued	23	95	99
Compensation expense	$ 1,973	$ 2,054	$ 1,428

INCOME TAXES - Provision for In

INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current:
Federal									$ 23,923	$ 23,872	$ 22,612
State									4,913	5,116	4,863
Total current									28,836	28,988	27,475
Deferred:
Federal									2,920	2,220	991
State									586	432	221
Total deferred									3,506	2,652	1,212
Net provision	$ 8,890	$ 8,825	$ 8,540	$ 6,087	$ 9,258	$ 8,831	$ 7,955	$ 5,596	$ 32,342	$ 31,640	$ 28,687

INCOME TAXES - Components of De

INCOME TAXES - Components of Deferred Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Provisions for doubtful accounts	$ 751	$ 879
Inventory costs capitalized for tax purposes	157	177
Inventory valuation reserves	331	652
Sales return reserves	218	190
Deductible expenses, primarily employee-benefit related	745	713
Accrued compensation	2,662	2,999
State tax liability	110	235
Revenue deferral	565	797
Other	1,076	1,276
Compensation under non-statutory stock option agreements	499	565
State tax loss carryforwards	618	505
Federal benefit for uncertain state tax positions	480	641
Total gross deferred tax assets	8,212	9,629
Less: Valuation allowance	(485)	(383)
Net deferred tax assets	7,727	9,246
Deferred tax liabilities:
Goodwill and other intangibles	(17,776)	(15,868)
Property and equipment	(9,553)	(7,084)
Total gross deferred tax liabilities	(27,329)	(22,952)
Net deferred tax liability	(19,602)	(13,706)
Current deferred tax assets		7,909
Noncurrent deferred tax liability	(19,602)	(21,615)
Net deferred tax liability	$ (19,602)	$ (13,706)

INCOME TAXES - Additional Infor

INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Examination
State net operating loss carryforwards	$ 951
Operating loss carryforwards, state tax benefits net of federal taxes	618	$ 505
State tax credit and state tax loss carryforwards, valuation allowance	485	383
Net change in the valuation allowance related to utilization and expiration of tax carryforwards	102	70	$ 64
Unrecognized income tax benefits, interest and penalties recognized	62	110	$ 80
Unrecognized income tax benefits, accrued interest	693	967
Unrecognized income tax benefits, accrued penalties	$ 171	$ 218
State Jurisdiction | Minimum
Income Tax Examination
Tax years remain open to examination	2,012
State Jurisdiction | Maximum
Income Tax Examination
Tax years remain open to examination	2,015
Internal Revenue Service (IRS) | Minimum
Income Tax Examination
Tax years remain open to examination	2,013
Internal Revenue Service (IRS) | Maximum
Income Tax Examination
Tax years remain open to examination	2,015
Expiring After 2017
Income Tax Examination
State net operating loss carryforwards	$ 8
Expiring After 2018
Income Tax Examination
State net operating loss carryforwards	6
Expiring After 2019
Income Tax Examination
State net operating loss carryforwards	5
Expiring After 2021
Income Tax Examination
State net operating loss carryforwards	2
Expiring Beyond 2022
Income Tax Examination
State net operating loss carryforwards	$ 927
Period 1
Income Tax Examination
State net operating loss carryforwards, expiration period	5 years
Period 2
Income Tax Examination
State net operating loss carryforwards, expiration period	15 years
Period 3
Income Tax Examination
State net operating loss carryforwards, expiration period	20 years

INCOME TAXES - Reconciliation o

INCOME TAXES - Reconciliation of Income Tax Provision To Total Income Taxes At Statutory Federal Tax Rate (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Taxes
Federal income taxes, at statutory tax rate									$ 28,159	$ 27,463	$ 24,979
State income taxes, net of federal benefit									3,947	3,962	3,459
Nondeductible expenses									602	538	503
Other-net									(366)	(323)	(254)
Net provision	$ 8,890	$ 8,825	$ 8,540	$ 6,087	$ 9,258	$ 8,831	$ 7,955	$ 5,596	$ 32,342	$ 31,640	$ 28,687

INCOME TAXES - Reconciliation58

INCOME TAXES - Reconciliation Of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Taxes
Beginning balance	$ 869	$ 892	$ 1,008
Additions on tax positions of prior years		106
Lapses of applicable statute of limitations	(185)	(129)	(116)
Ending balance	$ 684	$ 869	$ 892

EMPLOYEE BENEFIT PLAN (Details)

EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Compensation and Retirement
Employer matching contributions to employee savings	$ 2,320	$ 2,034	$ 1,873
Employer matching contributions to employee profit sharing plan	$ 0	$ 0	$ 0

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)contract	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)
Operating leases
Property leased from unrelated parties with remaining terms, minimum	1 year
Property leased from unrelated parties with remaining terms, maximum	10 years
Total rent expense	$ 4,753	$ 4,904	$ 4,322
Corporate headquarters
Operating leases
Operating lease term	5 years
Operating lease renewal term	5 years
Adjacent Office Facility
Operating leases
Operating lease term	10 years
Operating lease renewal term	2 years
Operating lease term, number of additional renewal option | contract	2
Related Party
Operating leases
Total rent expense	$ 1,640	$ 1,633	$ 1,639

COMMITMENTS AND CONTINGENCIES61

COMMITMENTS AND CONTINGENCIES - Future Aggregate Minimum Annual Lease Payments Under Operating Leases (Details) $ in Thousands	Dec. 31, 2016USD ($)
Operating leases
2,017	$ 4,454
2,018	4,075
2,019	2,275
2,020	2,321
2,021	1,487
2022 and thereafter	3,298
Related Parties
Operating leases
2,017	1,511
2,018	1,299
Others
Operating leases
2,017	2,943
2,018	2,776
2,019	2,275
2,020	2,321
2,021	1,487
2022 and thereafter	$ 3,298

OTHER RELATED-PARTY TRANSACTI62

OTHER RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Related Party Transactions
Sales of services to affiliated companies	$ 159	$ 177	$ 118

SEGMENT AND RELATED DISCLOSUR63

SEGMENT AND RELATED DISCLOSURES - Segment Information Applicable to Reportable Operating Segments (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net sales:
Net sales	$ 735,548	$ 708,485	$ 676,165	$ 572,394	$ 684,323	$ 680,769	$ 627,622	$ 581,259	$ 2,692,592	$ 2,573,973	$ 2,463,339
Operating income (loss):
Operating income (loss)	21,901	22,445	21,010	15,164	22,891	21,861	19,623	14,179	80,520	78,554	71,454
Interest expense	(14)	(27)	(12)	(14)	(20)	(29)	(39)	1	(67)	(87)	(86)
Income before taxes	21,887	$ 22,418	$ 20,998	$ 15,150	22,871	$ 21,832	$ 19,584	$ 14,180	80,453	78,467	71,368
Depreciation and amortization:
Depreciation and amortization									10,453	8,961	8,092
Total assets:
Total assets	686,134				639,074				686,134	639,074
Goodwill	73,602				51,276				73,602	51,276
Small and Medium Sized Businesses Segment
Total assets:
Goodwill	7,366								7,366
Large Account Segment
Total assets:
Goodwill	66,236				51,276				66,236	51,276
Operating Segments | Small and Medium Sized Businesses Segment
Net sales:
Net sales									1,091,182	1,040,586	1,037,620
Operating income (loss):
Operating income (loss)									41,596	42,855	39,608
Depreciation and amortization:
Depreciation and amortization									425	24	5
Total assets:
Total assets	240,665				207,147				240,665	207,147
Goodwill	7,366								7,366
Operating Segments | Large Account Segment
Net sales:
Net sales									1,011,990	961,013	850,796
Operating income (loss):
Operating income (loss)									42,504	41,234	39,229
Depreciation and amortization:
Depreciation and amortization									1,784	1,297	1,368
Total assets:
Total assets	361,431				320,633				361,431	320,633
Goodwill	66,236								66,236
Operating Segments | Public Sector
Net sales:
Net sales									589,420	572,374	574,923
Operating income (loss):
Operating income (loss)									8,561	6,879	3,621
Depreciation and amortization:
Depreciation and amortization									160	156	124
Total assets:
Total assets	95,278				73,374				95,278	73,374
Headquarters/Other
Operating income (loss):
Operating income (loss)									(12,141)	(12,414)	(11,004)
Depreciation and amortization:
Depreciation and amortization									8,084	7,484	$ 6,595
Total assets:
Assets net of intercompany balance eliminations	(11,240)				37,920				(11,240)	37,920
Intersegment Elimination.
Total assets:
Total assets	$ (49,937)				$ (36,752)				$ (49,937)	$ (36,752)

SEGMENT AND RELATED DISCLOSUR64

SEGMENT AND RELATED DISCLOSURES - Concentration Risk (Details) - segment	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information
Number of reportable segments	3
Net Sales | Geographic Concentration Risk | Foreign | Maximum
Segment Reporting Information
Percentage of sales by segment	2.00%	2.00%	2.00%
Net Sales | Customer | Single Customer | Maximum
Segment Reporting Information
Percentage of sales by segment	2.00%	2.00%	2.00%
Net Sales | Customer | Federal Government Agencies
Segment Reporting Information
Percentage of sales by segment	7.50%	6.70%	6.50%
Net Sales | Customer | Single Federal Government Agency | Maximum
Segment Reporting Information
Percentage of sales by segment	2.00%	2.00%	2.00%

QUARTERLY FINANCIAL RESULTS (65

QUARTERLY FINANCIAL RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Results (Unaudited).
Net sales	$ 735,548	$ 708,485	$ 676,165	$ 572,394	$ 684,323	$ 680,769	$ 627,622	$ 581,259	$ 2,692,592	$ 2,573,973	$ 2,463,339
Cost of sales	637,425	611,518	582,291	490,201	592,472	592,201	544,635	503,646	2,321,435	2,232,954	2,139,950
Gross profit	98,123	96,967	93,874	82,193	91,851	88,568	82,987	77,613	371,157	341,019	323,389
Selling, general and administrative expenses	76,222	74,522	72,864	67,029	68,960	66,707	63,364	63,434	290,637	262,465	251,935
Income from operations	21,901	22,445	21,010	15,164	22,891	21,861	19,623	14,179	80,520	78,554	71,454
Interest expense	(14)	(27)	(12)	(14)	(20)	(29)	(39)	1	(67)	(87)	(86)
Income before taxes	21,887	22,418	20,998	15,150	22,871	21,832	19,584	14,180	80,453	78,467	71,368
Income tax provision	(8,890)	(8,825)	(8,540)	(6,087)	(9,258)	(8,831)	(7,955)	(5,596)	(32,342)	(31,640)	(28,687)
Net income	$ 12,997	$ 13,593	$ 12,458	$ 9,063	$ 13,613	$ 13,001	$ 11,629	$ 8,584	$ 48,111	$ 46,827	$ 42,681
Earnings per common share:
Basic	$ 0.49	$ 0.51	$ 0.47	$ 0.34	$ 0.51	$ 0.49	$ 0.44	$ 0.33	$ 1.81	$ 1.77	$ 1.63
Diluted	$ 0.49	$ 0.51	$ 0.47	$ 0.34	$ 0.51	$ 0.49	$ 0.44	$ 0.32	$ 1.80	$ 1.76	$ 1.61
Denominator:
Basic	26,569	26,542	26,501	26,499	26,459	26,423	26,363	26,346	26,528	26,398	26,246
Diluted	26,738	26,736	26,691	26,671	26,632	26,622	26,616	26,593	26,719	26,616	26,512

SCHEDULE II - VALUATION AND Q66

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Allowance for Sales Returns
Valuation and Qualifying Accounts
Beginning Balance	$ 3,235	$ 3,223	$ 3,060
Charged to Costs and Expenses	32,909	30,289	32,882
Deductions/Write-Offs	(32,435)	(30,277)	(32,719)
Ending Balance	3,709	3,235	3,223
Allowance for Doubtful Accounts
Valuation and Qualifying Accounts
Beginning Balance	2,219	2,135	2,265
Charged to Costs and Expenses	360	1,097	1,383
Deductions/Write-Offs	(269)	(1,013)	(1,513)
Ending Balance	$ 2,310	$ 2,219	$ 2,135